My Investment Policy Statement

Below is a living document, published based on my own goals, convictions and experience. This is not financial advice.

The CFA curriculum calls the investment policy statement the first step in the portfolio management process. It governs what you aim to achieve, the risks you're willing to take, and the constraints you operate under. It's a contract between you and your portfolio manager.

In my case, I'm both parties, which makes it a contract with my future self.

My portfolio, as it stands today, is a mess. I own GameStop because Reddit convinced me (too late). I hold crypto on loved ones' recommendations. I have individual stocks with undocumented theses. Most are working, but I couldn't tell you why. It's a collection of impulses disguised as a portfolio.

This document aims to fix that.

I'm publishing it for one reason: radical intellectual honesty. If it's public, I can't quietly abandon it when markets get ugly. And when I'm wrong, you'll be able to see exactly where my thinking broke down.

My investment philosophy

I believe the most important factors in long-term investment success are understanding your portfolio, radical intellectual honesty, and diversification.

That belief rests on three principles.

I don't buy what I don't understand

Warren Buffett's circle of competence: only invest in businesses you understand. Explain the thesis in a paragraph, or don't own the stock.

Index funds are the exception: you're buying the market's collective intelligence, not pretending to have your own.

Dropping markets are buyer's markets

When everyone is panicking, fear creates mispricing. The losers in a bear market are the ones who sell.

Trust the market and yourself (50/50)

Most personal finance advice says: buy index funds, automate everything, don't think about it. Excellent advice for most people.

But I'm studying to be a professional investor: spending hundreds of hours on security analysis, financial statement analysis, and valuation. If I won't practice what I'm learning, what's the point?

Half my portfolio trusts the market's wisdom (index funds, market-cap-weighted, automated). The other half trusts my conviction (individual stocks, value plays, positions where I've done the work). Active management can't exceed 50%. Hard cap.

One more thing: at 25, my biggest asset is my human capital (the present value of everything I'll earn over 35+ years). The best investment I can make right now is in my earning potential (CFA, career pivot, skill acquisition). The portfolio is where I practice what I'm learning. The real compounding happens in my career.

My risk profile

The CFA curriculum distinguishes between two dimensions of risk tolerance: your ability to take risks (financial capacity) and your willingness to take risks (psychological tolerance). When the two conflict, you default to the lower.

Ability to take risks: high

25, no dependents, no mortgage, manageable expenses. My human capital dwarfs my portfolio by an order of magnitude. If my portfolio went to zero tomorrow, it wouldn't meaningfully change the trajectory of my life.

Willingness to take risks: high

I've never lived through a real bear market with real money on the line. It's easy to talk about "buying the dip" when your portfolio is small and markets are calm. I don't know how I'll react when I see 40% of my money gone, which is exactly why I'm writing this IPS. Bear markets are when wealth transfers from the impatient to the patient.

The career pivot risk

I'm pivoting from digital marketing to finance. My income may be volatile for 2–4 years (reduced salary during ramp-up, relocation costs, further education). This affects my savings rate, not my allocation.

My return objective

I'm targeting a real return of 5–7% annualised over a 10+ year horizon. Everything in this IPS is measured in real terms.

My time horizon is multi-stage:

• The primary horizon is 35+ years (retirement): aggressive growth, accept volatility, let compounding work.
• The secondary horizon is 3–5 years (career transition buffer): cash reserves and income. My portfolio doesn't play defence.

Note on benchmarks: I will not measure my portfolio against the S&P 500 alone. Measuring a diversified, multi-region portfolio against a single US large-cap index is a recipe for anxiety and bad decisions. My benchmark will be a blended index matching my actual allocation, weighted across the indices underlying my ETF holdings. The specific composition will be defined once fund selection is finalised.

My constraints

The CFA curriculum identifies five constraints: time horizon, taxes, liquidity, legal/regulatory, and unique circumstances (the acronym TTLLU).

Time horizon

35+ years. At 25, time is my single biggest structural advantage. I can hold through recessions, corrections, and lost decades. This is why I can afford to be aggressive.

Taxes

Switzerland doesn't tax capital gains on personal movable assets for private investors. The full upside of every winning position compounds without tax drag.

Dividends and interest, however, are taxed as regular income, so I tilt toward growth-oriented, lower-dividend securities and use accumulating (ACC) ETFs that reinvest dividends, deferring the taxable event.

Liquidity

3–6 months of living expenses in accessible cash. That's the emergency fund. It sits outside the portfolio and isn't counted in the allocation numbers below. Beyond that, everything is invested.

Legal and regulatory

No special restrictions as a private investor. But if and when I enter banking, compliance restrictions will apply (including disclosure requirements, restricted trading windows, and potentially restricted securities). I'll amend this IPS at that point.

Unique circumstances

• Career transition: Income may be volatile. The IPS accounts for this through the cash reserve rather than through allocation changes.
• Investing as education: Half my portfolio is a learning lab. The conviction sleeve exists because theory without application is decoration.
• No ESG screening: I look for returns, generate capital, and make impact through my gains. If I want to change the world, I'll do it with what I earn rather than constrain my portfolio to feel good about my holdings.
• Real estate aspiration: Long-term goal is property for diversification and financial freedom. Not in the portfolio today. When it happens, this IPS gets amended.

Asset allocation

• 90% equities
• 10% crypto
• Zero bonds

This will evolve with the commitments I take on. For now, I have the luxury of being aggressive.

The core split

The index sleeve (50% of portfolio)

All ETFs are Ireland-domiciled UCITS, accumulating, for Swiss tax efficiency. Currently held on Trade Republic; evaluating Interactive Brokers as I finalise Swiss residency.

I am deliberately overweight Europe relative to global market-cap weight. Switzerland is roughly 3% of global market capitalisation, and I'm above that. The rationale is practical (not patriotic): I live here, I spend in Swiss francs, and geographic proximity provides a psychological and practical hedge. A bet on European resilience.

The conviction sleeve (40% of portfolio)

Every position must satisfy three conditions:

1. I can explain the thesis in one paragraph
2. I've documented what I own, why I own it, and what would make me sell
3. No single position exceeds 10% of the total portfolio (hard cap)

The primary hunting ground is value opportunities when the market overcorrects. Warren Buffett, building on Benjamin Graham's "Mr. Market" concept, described the market as a voting machine in the short run and a weighing machine in the long run. I'm looking for situations where the votes are wrong and the weight will correct.

The crypto sleeve (10% of portfolio)

Bitcoin and Ethereum. That's it.

Smart contracts, decentralised finance, tokenisation of real assets: the applications are a matter of when, not if. I want exposure to the infrastructure layer while it's still early.

Currently, crypto makes up roughly 33% of my portfolio (significantly above target). I won't sell to rebalance. I'll bring it to target over time by directing new contributions to the other sleeves.

I accept the possibility of total loss on this allocation. If crypto goes to zero, my portfolio loses 10%, and my thesis was wrong. I can live with that.

What's not in the portfolio

Bonds, gold and commodities, ESG-screened funds, anything I don't understand.

My rules

Everything above is strategy. Strategy is easy to write. What follows is hard to follow.

What I will do

1. Check my portfolio once per month

Write a brief investor update (a paragraph per position), evaluating whether my theses still hold. The update catches thesis drift before it becomes a problem.

2. Direct new contributions to whatever is most underweight

This is my rebalancing method: contributions only. I never sell to rebalance. Simple, tax-efficient, unemotional.

3. Write a thesis for every conviction position

What I own. Why I own it. What would make me sell. If I can't write the thesis, I can't own the stock. This applies retroactively: current holdings get a documented thesis or get sold.

4. Treat bear markets as buying opportunities

When people are scared, I look to buy. Whether I can execute when the fear is real; that's what the rest of these rules are for.

5. Review this IPS every January

Also, after any qualifying life event.

What I will not do

1. Sell equity during a bear market

Unless a genuine life event demands immediate liquidity.

2. Move to cash based on macro forecasts, news, or sentiment

If I could predict the economy, I wouldn't need an IPS. Moving to cash is market timing wearing a sensible disguise.

3. Change my allocation because someone else's portfolio performed better

Comparison is the death of good investing. Someone else's returns are irrelevant to my strategy.

4. Add a new asset class without a 6-month waiting period

And a written rationale added to this document. Impulse diversification is not diversification.

5. Let the conviction sleeve exceed 50% of the portfolio

The index floor exists for a reason. My conviction may grow as my skills develop, but the floor doesn't move.

Review, amendments, and version history

Annual review

Every January. Re-read end to end, evaluate whether circumstances have changed, update if necessary. January aligns with new contribution limits, tax year transitions, and a natural reflection point.

Life events that trigger a review

• Marriage or new partnership
• Children
• Job change or income shift greater than 20%
• Receiving an inheritance
• Buying property
• Health event requiring significant funds
• Geographic relocation
• Entry into a regulated financial institution

The 90-day rule

Any proposed amendment must wait 90 days before implementation. Write down the change and the rationale. If I still want it after 90 days, it was probably rational. If I've forgotten about it, it wasn't.

The only exception is a genuine financial emergency.

Version history

Signature

This document was written during a period of clear thinking. It represents my best understanding of my circumstances, my goals, and my limits, as of today.

It will evolve as I do.