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Your investment strategy is a one-page document that clearly outlines your future intentions and criteria for success. Think of it as a guiding star that can be turned to whenever you’re unsure about the next action. 

The essential information 

While you’re free to include unique parameters – perhaps you’d like to indicate what your children should do after you’re gone, for example – there are some non-negotiable criteria to include in your strategy. 

These are: 

Your intended outcome 

What is the purpose behind your investing? Do you have a hierarchy of financial goals that begins with your children’s education and ends with a sports car? 

Your asset mix (portfolio) 

What do you think is the correct mix of asset types for ensuring great results, and protecting against negative market events? 

Your risk tolerance 

Are you the type who’s likely to lose sleep while you know your assets are facing uncertainty? Then acknowledging this will help you make decisions when you’re presented with opportunities. 

Your cost tolerance 

What level of fees are you willing to accept? The higher fees of managed funds may make sense if your time and attention are already dedicated to projects you care about. Or, you might have a strict philosophy of minimizing costs. 

We recommend this article on family constitutions (multi-generation investment strategy documents) for inspiration.

To end this series of long-term investing, we’ll finish with how to control your vices and become an investment master. 

About the author

Victor has more than 13 years of experience in wealth management. He has assisted many individuals, families, and institutions in their financial journey throughout his career, either by providing tailored advice on their investments or by managing assets on their behalf. He occupied a number of key positions within the investment divisions of CA Indosuez, Lombard Odier, and Citi Private Bank. He holds an Engineer’s degree in Bioinformatics and Modeling from the Institut National des Sciences Appliquées of Lyon, and he is a certified FRM. In his free time, Victor loves scientific readings and collecting rare books.

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