Portfolio Development and Analysis

Free CFP Exam lesson in Investment Planning. 13 min read, ~1,928 words.

The IPS governs every portfolio decision: return objectives + risk objectives + five constraints (liquidity, time horizon, tax, legal, unique). When risk tolerance and capacity conflict, the more conservative one governs, always. Nominal return = (1 + real)(1 + inflation) - 1. The additive shortcut is always a trap answer...