Passive Investor Investment Policy Statement
A passive investor is someone who invests in index funds and/or etfs and tries to get a similar return to the general market. This could be a new investor or one that is very experienced.
Purpose of portfolio
I want this portfolio to be available for retirement income. I am expecting a retirement income of $45,000 per year in today’s dollars.
Investment time horizon
I will have 60% stocks and 40% bonds.
I will rebalance my portfolio once a year at the beginning of January.
I’m hoping that this portfolio will return 3.2% real return (after inflation). This is based on the assumption that the stock portion will return 4% after inflation and the bond portion will return 2% after inflation.
I will only buy a low cost index fund based on the S&P 500 for both the stock and bond portion.