Bogleheads’ Retirement Planning: Investment Policy Statement

This is the second of my Bogleheads’ Retirement Planning series.

“Investment Policy Statement” a hoity-toity term for “make a contract with yourself on how you’ll invest”. What’s your risk tolerance? What allocation of investments do you want to maintain? How often will you rebalance? What’s your goal? How often will you reassess your goal?

I’ve had these things in my head, shuffling them around as I researched and toyed with percentages and numbers. What they weren’t was written down.

I’m not an emotional investor (in the commonly-used meaning), despite my geeking on the topic. I’m not chasing hot stocks. I’m not trying to time anything. I’m not selling.

That said, I’m not in a groove yet. I didn’t have a “number” until reading this book. I have an investing philosophy informed by my various readings, though. At its broadest, it’s “keep it simple” and “look at the whole picture”. In the nitty-gritty, it’s a simple index fund-based approach, piggybacking off of Coffeehouse Investor. No single stocks, no loaded funds.

I hadn’t nailed down desired allocations tighter than a 10% spread (20-30% in bonds, etc.), though, in part because I didn’t have a true assessment of my risk tolerance. I think I’m fine being pretty aggressive, but am I really, and better yet, is Greg? Greg is the ultimate “set it and leave it” finance guy, whereas I’m more inclined to want up-to-date net worth numbers and stats.

Sitting down–and in particular, reviewing with Greg (I’m almost married!)–and thinking about these things has crystallized my thinking moving forward as we merge our finances, as my current contract at Big Corp moves toward a close, and as we take a more methodical approach to the Gregory Weir business.

We have a lot of events coming up that will force a reassessment, but this was very good couple of hours spent.