# Write your own investment rules

> Write an investment policy statement: a loss limit, a stock share that fits it, and rules for rebalancing and review, set with real benchmark data.

Data as of Nov 10, 2026. Rebuilt every trading night.

## Write your own investment rules

Data as of Nov 10, 2026. Rebuilt every trading night.

From Jan 4, 2010 to Nov 10, 2026 , ETFIQ's 60% stock benchmark's largest fall was 22.31% , $66,930 on $300,000, hypothetically.

Planning Deep Dive · Lesson 6 of 6 1 2 3 4 5 6

Pick an amount. See what each mix's largest fall would have cost. Amount you have $300,000 On $300,000: 20% stocks −$56,220, 40% stocks −$60,960, 60% stocks −$66,930, 80% stocks −$84,450, 95% stocks −$98,220. Hypothetical amount. Largest fall from a high, Jan 4, 2010 to Nov 10, 2026, ETFIQ benchmarks applied to past prices.

### The question

"I know the ideas now. How do I turn them into rules I'll actually follow when markets get rough?"

### The idea

- An investment policy statement (IPS) is a one-page set of rules you write before you need them. Calm-day you writes it; worried-day you follows it. It answers five things: - Purpose and time: what the money is for, and when you'll need it.

- Loss limit: the largest fall from a high you can sit through without selling.

- Mix: the stock share that fits that limit.

- Upkeep: when you rebalance and what you'll pay in fees.

- Review: when you'll change the rules, and what does not count as a reason.

- It builds on sequence risk , regimes and look-through .

### Worked example

Alex has $300,000 and won't draw on it for 15 years. We'll use ETFIQ's benchmarks, from 20% to 95% stocks. Their history is hypothetical (each rule applied to past prices). Largest falls cover Jan 4, 2010 to Nov 10, 2026 ; yearly growth covers calendar years 2011 to 2025.

Rule 1. Purpose. "Retirement in 15 years. No withdrawals before then."

Rule 2. Loss limit. Alex writes: "I can sit through a 25% fall from a high."

Rule 3. Mix. Find the highest stock share whose largest fall stayed within 25%:

| Stock share | Largest fall | On $300,000 | Growth a year, 2011 to 2025 |
| --- | --- | --- | --- |
| 20% | −18.74% | $56,220 | 3.97% |
| 40% | −20.32% | $60,960 | 5.54% |
| 60% | −22.31% | $66,930 | 7.06% |
| 80% | −28.15% | $84,450 | 8.51% |
| 95% | −32.74% | $98,220 | 9.56% |

60% fits; 80% doesn't. Alex writes: " 60% stocks. Expect falls of about $67,000 , or worse: history isn't a ceiling."

Rule 4. Upkeep. "Rebalance to 60/40 when stocks drift above 65% or below 55%, checked each quarter. Keep the blended fee under 0.10%." A 60% VTI, 40% BND mix costs 0.03% a year, $3 on $10,000, per ETFIQ's builder on Nov 10, 2026 .

Rule 5. Review. "Once a year, and after a life change. A market fall is not a reason to change Rule 3."

Five lines, each with a number to check.

### The common mistake

"I'll set my limit from the worst calendar year." Calendar years hide falls that span two years. The 60% benchmark's worst year lost 15.83% ( 2022 ), but its fall from the Nov 8, 2021 high to the Oct 14, 2022 low was 22.31% .

Set a 17% limit from calendar years and the 80% mix looks fine (worst year −16.89% ), yet its largest fall was 28.15% , in five weeks of 2020 . Use the fall from a high.

### Check your understanding

Pick an answer to see why. Two of three right passes the lesson.

1. Why write an IPS before markets fall? A So the rules match the latest news B Because it improves returns C So decisions made calmly guide you when you're worried D Because a broker requires it Answer: C. So decisions made calmly guide you when you're worried. it carries calm choices into a hard day. Not B: an IPS doesn't change returns; it helps you stick to a plan. 2. Sam's loss limit is 21%. Using the table, which is the highest stock share whose largest fall stayed within it? A 20% B 40% C 60% D 80% Answer: B. 40%. 40% fell 20.32% , inside 21%; 60% fell 22.31% . Not C: 22.31% is over the limit. 3. Alex's 60/40 mix is down 18% from its high. What does the IPS say to do? A Keep 60% stocks, rebalancing only if stocks drifted outside 55% to 65% B Move to 20% stocks C Sell everything until it recovers D Rewrite the rules now Answer: A. Keep 60% stocks, rebalancing only if stocks drifted outside 55% to 65%. an 18% fall of the mix is inside Alex's 25% limit, and Rule 5 says a fall is not a reason to change. Not D: changing rules mid-fall is what the IPS exists to stop.

### Takeaways

- Write your rules on a calm day: purpose, loss limit, mix, upkeep, review.

- Set the loss limit from the largest fall from a high, not the worst calendar year.

- Pick the stock share on ETFIQ's benchmarks, then build it in the ETF Models builder.

### Do it on ETFIQ

Build the mix your rules call for

### Where to next

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Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.
Cite: ETFIQ, Write your own investment rules, data as of Nov 10, 2026. https://etfiq.com/academy/planning-deep-dive/investment-policy-statement/
Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.
HTML: https://etfiq.com/academy/planning-deep-dive/investment-policy-statement/