Why should every investment policy include a concise statement of objectives?

Including a concise statement of objectives in every investment policy is vital because it directly influences the overall strategy and goals of the investment program. This statement serves as a foundational guideline that outlines what the investment program aims to achieve, whether that's maximizing returns, ensuring liquidity, or preserving capital. By clearly defining these objectives, stakeholders have a shared understanding of what the investment strategy should focus on, tailoring decisions and actions to align with these set goals. This level of clarity fosters a disciplined approach to investing and aids in evaluating the program's performance over time.

While other factors like safety of funds and liability limits are essential elements of investment policies, the primary role of the objectives statement is to establish a clear, unified direction for the investment strategy, making it the most critical aspect of any investment policy.