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ForIllustrativePurposesOnly
SampleInvestmentPolicyStatement
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Purpose
ThepurposeofthisInvestmentPolicyStatement(IPS)istoassistusandouradvisersindocumenting,
implementing,monitoring,andevaluatingourinvestmentportfolio.Inthisdocument,wedescribeour
investmentobjective,risktoleranceandotherimportantfactorsusedtodevelopourinvestmentstrategy,our
targetassetallocation,andcriteriausedtoselectandevaluateourchoseninvestmentmanagers.
General Information
ClientName JamesT.Client
ClientDateofBirth 1/1/1945
Employer Retired
CoClientName JaneM.Client
CoClientDateofBirth 1/1/1946
Employer Retired
CurrentInvestableAssets $10,000,000
InvestmentAdviser AltairAdvisersLLC
Investment Objective
Growth:Theobjectiveistoachievealongterm,aftertaxandafterexpenseannualrateofreturnonthe
portfoliothatisatleastthreepercentagepointsgreaterthantherateofinflationasmeasuredbytheU.S.
ConsumerPriceIndex(CPI).
Time Horizon
Theseinvestmentguidelinesarebaseduponanoverallinvestmenttimehorizonofatleast5years;therefore,
cyclicalmarketfluctuationswillbeviewedwiththatperspective.Werecognizethatinvestingisultimatelya
longtermexerciseandthatshorttermreactionstomarketeventscanbecounterproductiveandharmfulto
successfulinvesting.Webelievewehaveboththetemperamentandthefinancialwherewithaltorideoutshorttermmarketactivityandultimatelycouldbenefitfromtherewardsthathavehistoricallyaccruedto
longterminvestors.
Cash Flow and Portfol io Withdrawals
Veronicaiscurrentlyworkingandplanstocontinueworkingforthenextfewyears.
Weexpectourcashflow
needstobecoveredbysalary,otherinflowsandourliquidityreserve.Wehaveseparatecashreservesforour
shorttermcashflowneedsanddonotanticipaterequiringanymajorwithdrawalsfromtheportfolioforthe
foreseeablefuture.
Income Taxes
Ourinvestmentadviserandtherecommendedinvestmentmanagersshouldrecognizethatouraccountsare
subjecttocurrentfederalandIllinoistaxation,(exceptourIRAsandotherqualifiedretirementaccounts).To
theextentpossible,ouraccountsshouldbemanagedinamannerconsistentwithmaximizingthelongterm
returnontheportfolioonanaftertaxbasis,recognizingthelongtermerodingeffectsofincomeandcapital
gainstaxesonwealth.Weunderstandthatisitimportanttomonitoranddiscussourtaxsituationovertime
withourtaxaccountantandinvestmentadviser.Anychangestoourtaxsituationmayresultinan
adjustmenttoourportfoliotobettermaximizeitsaftertaxperformance.
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Risk Tolerance
Werecognizethatachievingourinvestmentobjectives,inlightoftheuncertaintiesandcomplexitiesofthe
capitalmarkets,willrequirethatsomeinvestmentriskbeincurred.
Weunderstandthatthereisnosuch
thingasariskfreeinvestmentandwecouldlosemoneyifthisinvestmentpolicyisimplemented.
Several
factorshavebeenconsideredindeterminingourabilitytowithstandshort
andintermediatetermmarket
priceandtotalreturnvolatility. Thesefactorsare:
Losstolerance
Wehavedefinedourrisktolerancetargetsasnotmorethana5.0%chancethatourinvestment
portfoliodescribedhereinwilldeclinebymorethan
approximately5.2%inanyoneyear.However,we
understandthatlossesinexcessof5.2%canoccur
duringextreme,negativemarketconditions.Asan
example,aportfoliowithanassetallocationsimilar
toourslost23.4%during2008.
LiquidityReserve
Wewillmaintainaliquidityreserveinlowriskcash
equivalentinvestments.Thispreventsusfrom
liquidatingthe
portfolio
at
inopportune
times
and
providesapsychologicalsafetynet.
Experiencewithhigherriskassetssuchascommon
stock
Atleast10yearsexperiencewithstocks.
Risk Allocation and Asset Allocation
WeunderstandthatAltairassignseachassetclasstooneofthreebroadriskcategories:higherrisk,medium
riskandlowerrisk.Theseclassificationsarebasedupontheriskofprincipalloss.
Basedonourfinancialsituation,objectives,returnexpectations,risktoleranceandconstraints,ourstrategic
(longterm)allocationandacceptablerangesofhigher,mediumandlowerriskinvestmentsaredetailedin
thetablebelow:
Risk Category Asset Class Strategic (Long-term) Target Range
Higher Risk 50.0% 38.0-62.5%
LargeCap 11.5% 5.517.0%
AllCap 4.0% 2.06.0%
SmallCap 5.5% 3.08.5%
IntlEquity 14.0% 7.021.0%
Commodities 5.0% 2.57.5%
RealEstate
10.0%
5.0
15.0%
HighYield 0.0% 0.010.0%
Medium Risk 20.0% 10.0-30.0%
Hedged/Opp 20.0% 10.030.0%
Lower Risk 30.0% 18.0-42.0%
FixedInc 30.0% 18.042.0%
Note:PleaseseeGlossarylaterinthisdocumentfordefinitions
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However,overtimethefinancialsituation,objectives,and/orrisktolerancemaychange,sothe
appropriatenessoftheassetallocationstrategywillbereviewedatleastannually.
Tactical Portfolio Positioning
Ingeneral,theportfoliowillbeallocatedaccordingtothestrategic(longterm)assetallocation.However,the
investmentmarketsarevolatileandexperienceperiodsofdislocationthatcanprovideopportunitiesto
increasereturnand/orreduceriskbydepartingfromthestrategic(longterm)assetallocation.
Fromtimeto
timespecificassetclassesand/orstylesmay,inAltairsview,beundervalued(orlessrisky)implyingahigherexpectedreturn,orovervalued(orriskier)implyingalowerexpectedreturn.Asaresult,Altairwillunder
or
overweightoneormoreofthethreeriskcategories(higher,mediumandlower)andthevariousassetclasses
withineachriskcategorybaseduponitsanalysisoftheinvestmentmarkets.Thesetacticalshiftsarelimited
totherangesforeachriskcategoryestablishedintheRiskAllocationandAssetAllocationsection.
Specifically,Altairwilldivideeachriskcategoryrangeintothreeequalparts.
Foranoverweight
recommendation,thecurrenttargetallocationisthemidpointofthetop1/3oftherange,foraneutral
recommendationthecurrenttargetallocationisthemidpointofthemiddle1/3oftherange(whichisalsoour
strategic(longterm)target)andforanunderweightrecommendationthecurrenttargetallocationisthe
midpointofthebottom1/3oftherange.
Portfolio Rebalancing
Marketforceswillshifttheweightingsofthethreeriskcategories(higher,mediumandlower)andthe
variousassetclasseswithineachriskcategory.Ifnotcorrected,overtimetheportfolioscompositioncould
materiallyvaryfromtheintendedassetallocationandthereforeresultinaportfoliothatistooriskyortoo
conservative.Altairwillreviewandrebalanceatleastquarterly,whenactualriskcategoryweightingsvary
significantlyfromthecurrenttargetweightings.Eachriskcategoryhasrangesthatdefinetheminimumand
maximumportfolioweightings.
Altairsportfoliomanagementmethodologyistodivideeachoftheserangesintothirds.Atanygiventime,
thecurrenttargetallocationtoeachriskcategorywillbeinoneofthesethirdsdependinguponAltairs
currentrecommendations.Foranoverweightrecommendationthetargetallocationisthemidpointofthetop
1/3oftherange,foraneutralrecommendationthetargetallocationisthemidpointofthemiddle1/3oftherange(whichisalsothestrategicorlongtermtarget)andforanunderweightrecommendationthetarget
allocationisthemidpointofthebottom1/3oftherange.
Finally,therecanbecostsassociatedwithrebalancingtheportfolio,suchastransactioncostsandtaxes,and
thatthesecostswillbeconsideredbyAltairbeforetheportfolioisrebalanced.
Also,rebalancingactivities
maybeconstrainedbytheilliquidinvestment(s)withintheportfolio.
Portfolio Performance Expectations
BasedonModernPortfolioTheory,ananalysisofhistoricaldata,andassumptionscontainedinAltairs
modelingsoftware(maintainedbyIbbotsonAssociates,awhollyownedsubsidiaryofMorningstar,Inc.),
Altair
has
informed
us
that
our
portfolio,
based
upon
our
strategic
asset
allocation,
is
projected
to
achieve
an
annuallongtermaveragereturn(pretaxandpreexpense)of9.4%,withanannualstandarddeviation(risk)
of9.5%.Werealizethatmarketperformancewillvaryanda9.4%pretaxandpreexpense)averagerateof
returnmaynotbeachievedduringsomeoralltimeperiodsandthatwecouldlosemoney.Wealso
understand,asdescribedwithintheTacticalPortfolioPositioningsection,ourportfoliowillnotalwaysbe
allocatedexactlytoourstrategicassetallocation.Asaresult,thelongtermaverageannualreturnandrisk
estimatesmaydifferbasedonouractualassetallocationatanygiventime.Ingeneral,theaverageannual
marketreturnswillbeevaluatedoverperiodsofthreetofiveyears.Again,weunderstandthatthesereturns
areillustrationsonlyandarenotpredictionsofhowanyspecificportfoliooranymanagersorfundsselected
forourportfoliowillperform.
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Separate Account Managers Evaluation & Selection Process
Altairconductsseparateaccountmanagerresearchusingaprocessthatisablendofqualitativeand
quantitativeevaluationtechniquesresultinginalistofcandidateswhichAltairbelievessuitableforthe
portfolio.
CriteriaAltairconsidersatvariousstagesinthesearchinclude:
Performancetrackrecord,forconsistencyandfrequencyofoutperformancerelativetoappropriatepeersandbenchmark
Appropriatereturngiventhelevelofrisk
Assetsize,numberofsecurities,portfolioturnoverandstrategycapacity
Organizationalstability,includingtheownershipstructureandcompensationprograms
Sound,consistentandrepeatableinvestmentprocess
Investmentprofessionalsexperienceintheindustryandtenurewiththefirm
ExperiencewithtaxableclientsandwillingnesstonegotiatereducedfeesforAltairclients
ResponsestoAltairsproprietaryquestionnaires
Absenceofunfavorablepublicityormateriallitigation
ReviewofFormADVforcompliancerecord
Inperson
visits
to
confirm
the
above
criteria
Mutual Funds Evaluation & Selection Process
Altairconductsmutualfundresearchusingaprocessthatisablendofqualitativeandquantitative
evaluationtechniquesresultinginalistofcandidateswhichAltairbelievessuitablefortheportfolio.
CriteriaAltairconsidersatvariousstagesinthesearchinclude:
Performancetrackrecord,forconsistencyandfrequencyofoutperformancerelativetoappropriatepeersandbenchmark
Appropriatereturngiventhelevelofrisk
Assetsize,numberofsecurities,portfolioturnoverandstrategycapacity
Organizationalstability,includingtheownershipstructureandcompensationprograms
Sound,consistentandrepeatableinvestmentprocess
Investmentprofessionalsexperienceintheindustryandtenurewiththefirm
Abilityofthefundstoconstructandmaintainportfoliosinataxefficientmanner
Coststructure,includingexpenseratios,brokeragecommissionsandinstitutionalpricing
Risk and Return Assumptions
Asset Class Pre-Tax Return (%) Risk (% Standard Deviation)
LargeCapEquity 11.66 20.31
SmallCap
Equity
14.33
28.71
International Equity 12.50 26.46
FixedIncome 4.65 7.38
HighYieldFixedIncome 7.33 12.63
RealEstate 12.64 18.43
Hedged/Opportunistic 10.20 6.90
PrivateEquity 21.48 31.10
Commodities 12.76 21.46
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Performance Benchmarks
Thematrixbelowillustratesthelongtermandshorttermbenchmarkstobeutilizedforeachassetclass
withineachriskcategory.Thelongtermbenchmarkswillbeusedasthecomponentsofanytotalportfolio
benchmarks.
Higher Risk Assets Long-Term Benchmark Short-Term Benchmark
LargeCapCoreEquity S&P500CompositeIndex None
LargeCapGrowthEquity S&P500CompositeIndex
Russell1000GrowthIndex
LargeCapValueEquity S&P500CompositeIndex
Russell1000ValueIndex
SmallCapCoreEquity Russell2000Index None
SmallCapGrowthEquity Russell2000Index Russell2000GrowthIndex
SmallCapValueEquity Russell2000Index Russell2000ValueIndex
AllCapEquity Russell3000Index None
AllCapGrowthEquity Russell3000Index Russell3000GrowthIndex
AllCapValueEquity Russell3000Index Russell3000ValueIndex
InternationalEquity
MSCIEAFEIndex MSCIACWorldex.U.S.Index
InternationalSmallCapEquity MSCIEAFESmallCapIndex None
EmergingMarketsEquity MSCIEmergingMarketsIndex None
RealEstate(REITs) MorganStanleyREITIndex None
GlobalRealEstate(REITs) S&PDevelopedPropertyIndex None
InternationalRealEstate(REITs) S&PGlobalexU.S.PropertyIndex
None
Commodities DowJonesUBSCommoditiesIndex None
HighYieldFixedIncome BarclaysCapitalHighYieldIndex None
Medium Risk Assets Long-Term Benchmark Short-Term Benchmark
NonDirectionalFundofFunds HFRIFundofFundsCompositeIndex
TBill(1Month)+5%
DirectionalFundofFunds HFRIFundofFundsStrategicIndex None
MultiAsset MultiAssetBenchmark* None
GlobalMultiAsset 60%MSCIACWorld/40%BarCap
Agg
None
DiversifiedAlternatives DiversifiedAlternativesBenchmark**
None
HedgedEquity 60%S&P500CompositeIndex None
Lower Risk Assets Long-Term Benchmark Short-Term Benchmark
TaxableFixedIncome BarclaysCapitalAggregateIndex None
MunicipalFixedIncome BarclaysCapital110yearMunicipal
Index
BarclaysCapital10yearMunicipal
Index
Cash CitiSB1MonthTBillIndex None
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*MultiAssetBenchmarkconsistsof76%HFRXGlobalIndex,8%MSCIUSREITIndex,8%BarclaysCapitalHighYield
Index,and8%DJUBSCommodityIndex.
**DiversifiedAlternativesBenchmarkconsistsof70%HFRIFundofFundsCompositeIndex,10%MSCIU.S.REITIndex,
10%MSCIACWorldIndex,and10%DJAIGCommodityIndex.
Addit ional Inf ormati on
ThisIPSisbaseduponinformationthatwehavemadeavailabletoAltair.TheIPSispreparedforour
confidentialuse.
We
understand
that
changes
in
our
financial
situation
or
the
investment
markets
could
cause
certainportionsofthisIPStobeinapplicableorinappropriateinthefuture.Consequently,ifwehaveany
changesinoursituation,weshouldreviewthepotentialimpactonourIPS.ChangesinourIPSmayrequire
Altairtochangetheallocationofourassetsortheidentityofourinvestmentmanagers.
Weunderstandtheassetallocationsoftwareusedtoestimatecertainportfoliostatistics,mainlyriskand
return,ismaintainedbyIbbotsonAssociates,awhollyownedsubsidiaryofMorningstar,Inc.Inaddition,we
realizethereturns,standarddeviationsandcorrelationcoefficientsofthevariousassetclassesusedinthe
programarebasedupondataprovidedbyIbbotsonAssociates.Weunderstandthesemeasurementsarenot
intendedtoaccuratelypredictfutureinvestmentperformance,butareintendedtobeusedastoolstogauge
ourtoleranceforvolatility.Accordingly,werecognizetheinformationcontainedinthisanalysisshouldbe
viewedasanillustrationandnotasapredictionanddoesnotguaranteeresults.
ThisInvestmentPolicyStatementdoesnotincludespecificlegal,accounting,taxorotheradvice.
Finally,weunderstandthatthereisnosuchthingasariskfreeinvestmentandwecouldlosemoneyifthis
investmentpolicyisimplemented.
Addit ional Ri sks Assoc iated wi th Investments i n Hedge
Funds, Pri vate Equi ty, and Private Real Estate
LiquidityRisk:
Wehaveadequatemeansofprovidingforcurrentandfuturecashflowneedsandhavenoneedforliquiditywithrespecttoourinvestmentinhedgefunds,privateequityandprivate
realestate.Altairhasexplainedthattheseinvestmentsareilliquidinterestsinprivatepartnerships
andmaysubjectustocertainlockupperiodswherewemaynotbeabletoaccesssomeorallofthe
fundswe
have
invested
in
such
vehicles
(the
specific
lock
up
periods
are
contained
in
the
subscriptiondocumentofeachinvestment)andthatAltaircannotcontrol(orinfluence)thelockup
periodonanyoftheseinvestments.
TransparencyRisk:Investmentsinhedgefunds,privateequityandprivaterealestateareoftenmadethroughinvestmentinlimitedpartnerships.
Theassetsofthepartnershiparenottransparentasis
thecasewithtraditionalstocksandbonds.
Transparencyinthissensereferstotheabilityofan
investortolookdirectlyintoaninvestmentportfolioandseeallitscomponents,providingthe
opportunitytoclearlygaugeperformanceandassessriskexposure.
LackofMarketabilityRisk:
Onceacommitmentismade,itcanbedifficultorimpossibletotransferownershipintheinvestmenttoanotherinvestor.
Glossary
GlobalEquitiesIncludes:
LargeCapEquity
ThisassetclassprimarilyconsistsofU.S.equitysecuritiessimilarinsizetothoseintheS&P500orRussell
1000indices,generallywithamarketcapitalizationof$2billionorgreater.
Largecapportfoliosaretypically
representativeoftheoverallU.S.equitymarketinsize,growthrates,andprice.
Largecapequitymanagers
maymanageassetstoindividualstylessuchasvalue,whichtargetsstockstradingbelowunderlyingbusiness
value,orgrowth,whichtargetsstocksexhibitinghighgrowthprospectsrelativetothebroadermarket.
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SmallCapEquity
ThisassetclassprimarilyconsistsofU.S.equitysecuritiessimilarinsizetothoseintheRussell2000index,
generallywithamarketcapitalizationof$2billionorsmaller.
Smallcapequitymanagersmaymanageassets
toindividualstylessuchasvalue,whichtargetsstockstradingbelowunderlyingbusinessvalue,orgrowth,
whichtargetsstocksexhibitinghighgrowthprospectsrelativetothebroadermarket.
AllCapEquity
ThisassetclassprimarilyconsistsofU.S.equitysecuritiesacrossboththelargeandsmallcapuniverses.
Allcapmanagersinvestaccordingtoindividualstylesthataretypicallydifficulttocategorize.
Allcapmanagers
mayalsotakeadvantageofopportunitiesinforeignmarketsortacticallyholdsignificantamountsofcash.
InternationalEquity
ThisassetclassprimarilyconsistsofequitiessimilartothoseintheMSCIEAFEindex.
Internationalequity
managersinvestinequitiesrepresentingcompaniesheadquarteredindevelopedcountriesoutsideoftheU.S.
(sometradeasAmericanDepositoryReceipts(ADRs)onU.S.exchanges),suchastheUnitedKingdom,
Germany,France,Australia,andJapan.
Managersmayalsoallocatetoemergingmarkets.
InternationalSmallCapEquity
Thisasset
class
primarily
consists
of
equities
similar
to
those
in
the
MSCI
EAFE
Small
Cap
index,
generally
withamarketcapitalizationof$2billionorsmaller.
Internationalsmallcapequitymanagersinvestin
equitiesrepresentingcompaniesheadquarteredindevelopedcountriesoutsideoftheU.S.(sometradeas
AmericanDepositoryReceipts(ADRs)onU.S.exchanges),suchastheUnitedKingdom,Germany,France,
Australia,andJapan.
Managersmayalsoallocatetoemergingmarkets.
EmergingMarketsEquity
ThisassetclassprimarilyconsistsofequitiessimilartothoseintheMSCIEmergingMarketsindex.
Managers
investinequitiesrepresentingcompaniesheadquarteredinemergingmarkets(sometradeasAmerican
DepositoryReceipts(ADRs)onU.S.exchanges),suchasBrazil,China,Russia,IndiaandSouthAfrica.
PrivateEquity
Thisassetclassconsistsofilliquidinvestmentsinprivatecompaniesthataregenerallydividedbetween
ventureandbuyoutstrategies.
Venturecapitalinvolvesinvestingdirectlyinfirmsthatrangefromstartups
tofastgrowingsmallcompanies.
Buyoutsutilizeleveragetobuyacontrollinginterestinanestablished
business,recapitalizeabusiness,ortakeapubliccompanyprivate.
RealEstateIncludes:
RealEstateInvestmentTrusts(REITs)
Thisassetclassprimarilyconsistsofequitysecuritiesinpubliclytradedcompanieswhoseprimarybusinessis
ownershipandoperationofcommercialrealestate,similartothoseintheMorganStanleyREITIndexforUS
REITSandtheS&P/CitiGlobalexU.S.PropertyIndexforthoselocatedoutsidetheUnitedStates.
PrivateRealEstate
Thisassetclassconsistsofilliquidinvestmentsinpartnershipsthatdirectlyinvestinprivatelyowned
commercialrealestate.
Commodities
Realorhardassetsthataregenerallytherawmaterialsintheproductionprocess,includingenergy,livestock,
grainsandmetals.
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FixedIncomeIncludes:
Taxable
ThisassetclassprimarilyconsistsofinvestmentgradefixedincomesecuritiessimilartothoseintheBarclays
CapitalU.S.AggregateBondindex.
Managersinvestinsecuritiesthatarenotexemptfromfederaltaxation,
suchassecuritiesissuedbycorporations,federalgovernments,andgovernmentagencies.
Managerportfolio
durationistypicallythreetosevenyears.
Municipal
ThisassetclassprimarilyconsistsofinvestmentgradefixedincomesecuritiessimilartothoseintheBarclays
Capital110YearMunicipalBondindex.
Managersinvestinsecuritiesthatareexemptfromfederaltaxation,
suchasthoseissuedbystateandlocalgovernments.
Managerportfoliodurationistypicallythreetoseven
years.
HighYieldFixedIncome
ThisassetclassprimarilyconsistsofU.S.noninvestmentgrade(creditratingbelowBBB)fixedincome
securitiessimilartothoseintheBarclaysCapitalHighYieldindex.Bondsinthiscategorygenerallyhave
higheryieldsbecausetheissuingcompaniesarelessfinanciallysecureandmustpayhigherratesthanmore
creditworthyborrowers.
Hedged/OpportunisticIncludes:
FundofHedgeFunds DirectionalandNonDirectional
Thisassetclassconsistsofdiversifiedpartnershipsinvestinginunderlyinghedgefundsthatattemptto
generatepositivereturnsirrespectiveoftheoverallmarketdirectionandhavetheflexibilitytofollowawide
rangeofinvestmentstrategies.
Hedgefundmanagersoftenutilizeavarietyoffinancialinstruments(options,
ETFs,swaps,futures,etc.)whereastraditionalmanagersuseequityandfixedincomesecurities.
Hedgefunds
havetheabilitytobuysecurities,whichwouldincreaseportfolioreturnswithariseinthesecurityprice,and
shortsellsecurities,whichwouldincreaseportfolioreturnswithafallinthesecurityprice.
Hedgefunds
often
also
use
leverage
to
enhance
returns,
which
increases
the
portfolio
risk
profile.
Common
hedge
fund
strategiesincludedirectionalequitylong/short,marketneutrallong/short,eventdriven,convertiblearbitrage,
mergerarbitrage,andglobalmacro.
HedgedEquity/MultiAsset/GlobalMultiAsset/DiversifiedAlternativeInvestments
Thisassetclassconsistsofinvestmentsthatattempttogeneratepositivereturnsirrespectiveoftheoverall
marketdirectionandhavetheflexibilitytofollowawiderangeofinvestmentstrategies.
Theseinvestments
maybeintheformoflimitedpartnerships,separateaccounts,ormutualfunds.
Managersofferdiversified
vehicleswithexposureacrosstraditionalandnontraditionalassetclasses,whichmayincludehighyield
fixedincome,privateequity,realestate,andcommodities.
Likehedgefunds,managersutilizeavarietyof
financialinstruments,canbuyandshortsellsecurities,andcanemployleverage.Commonstrategiesinclude
directionalequitylong/short,marketneutrallong/short,eventdriven,convertiblearbitrage,mergerarbitrage,
andglobalmacro.
CashEquivalents
Fixedincomesecuritiesormoneymarketswithmaturitiesoflessthan90dayswithinvestmentgradecredit
ratings
thatareveryliquid.Thiscategorymayalsoincludebankdeposits.
ConsumerPriceIndex(CPI)
Anonseasonallyadjustedmeasureoftheaveragechangeovertimeinthepricespaidbyallurbanconsumers
foramarketbasketofconsumergoodsandservicesarrangedinthefollowingcategories:food,housing,
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apparel,transportation,medicalcare,recreation,education,andothergoodsandservices.Theindexisalso
knownas headlineinflation
andincludesthepricechangesoffoodandenergy.Theindexusesasabasethe
averagepricelevelofthatbasketofconsumergoodsandservicesforthe36monthperiodfrom1982to1984.
LongTermandShortTermBenchmarks
Theprimaryandsecondarybenchmarksrespectivelyusedtomeasuremanagerperformance.Forexample,
thelongterm(primary)benchmarkforanyUSlargecapmanageristheS&P500Index,whiletheshortterm
(secondary)benchmarkisbaseduponthemanagersstyle(i.e.Russell1000GrowthIndexforagrowthstyleorRussell1000ValueIndexforavaluestyle).Someassetclassesandmanagersonlyhavealongterm
(primary)benchmark.
Client Responsibilities
Wewillmeetwithourinvestmentadviser,Altair,atleastannuallytoconfirmtheaccuracyand
appropriatenessofthisIPSandAltairsimplementationofthisIPS.
WewillprovideAltairinformationnecessarytoupdatethisIPS,including:
Anychangestoourprojectedcashflow,portfoliowithdrawalrequirements,ortaxsituation;
Anychangesinrisktoleranceorinvestmentconstraints;
Anysignificantchangetoournetworth.
WehavereviewedandunderstandthisIPSandconfirmthatitisasuitableapproach
givenourfinancialsituation,objectives,returnexpectations,andrisktolerance.
James T. Client Date Jane M. Client Date
