The Need For A Policy Statement

The Need For A Policy Statement - 2-1The Need For A Policy

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Unformatted text preview: 2-1The Need For A Policy Statement•Understand investor’s needs and articulate realistic investment objectives and constraints–What are the real risks of an adverse financial outcome, and what emotional reactions will I have?–How knowledgeable am I about investments and the financial markets?–What other capital or income sources do I have? How important is this particular 2-2The Need For A Policy Statement•Sets standards for evaluating portfolio performance–The statement provides a comparison standard in judging the performance of the portfolio manager.–A benchmark portfolio or comparison standard is used to reflect the risk an return objectives specified in the policy statement.–It should act as a starting point for periodic portfolio review and client communication 2-3The Need For A Policy Statement•Other Benefits–It helps reduces the possibility of inappropriate or unethical behavior on the part of the portfolio manager....
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This note was uploaded on 01/24/2012 for the course FIN 4360 taught by Professor Davidbray during the Spring '12 term at Kennesaw.

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The Need For A Policy Statement - 2-1The Need For A Policy

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