What is an investment policy statement (IPS) designed for?

An investment policy statement (IPS) is a crucial document that outlines an investor's specific goals, risk tolerance, investment preferences, and guidelines for managing their investment portfolio. It serves as a foundational element in the investment process, ensuring that all investment decisions align with the investor's objectives and constraints.

The IPS provides clarity on various aspects such as the time horizon for investments, asset allocation strategies, and the overall approach to portfolio management. By formalizing these elements, the IPS facilitates better communication between the investor and the investment manager or advisor. This document helps in maintaining discipline during market fluctuations and ensures a consistent strategy that reflects the investor's long-term vision.

In contrast, the other options focus on different aspects of business and investment strategy that are not the primary purpose of an IPS. For example, stating a company's earnings strategy is more aligned with corporate financial planning, while predicting market trends and defining tax strategies pertain to broader market analysis and tax planning, respectively, rather than the personalization of a specific investment strategy.