Investments

General

The overall portfolio should be managed in accordance with the Prudent Man or Prudent Person rule. The definition of prudence is based on RSA 31:25-b as follows:

“a prudent investment is one which a prudent man would purchase for his own investment having primarily in view the preservation of the principal and the amount and regularity of the income to be derived there from.”

Scope

This investment policy applies to all money and financial resources, governed by the Library Board of Trustees, available for investment on behalf of the Amherst Town Library.

Objectives

The primary objective of the library’s investment activities are:

  1. Legal: to conform with all applicable federal, state and other legal requirements
  2. Safety: to adequately safeguard principal
  3. Liquidity: to provide sufficient liquidity to supplement town funding
  4. Total Return: to obtain a reasonable rate of return
  5. Diversified Allocation across all library assets: to allocate funds taking all library Trustee assets into account, which includes library assets managed by the Trustees of the Trust Fund

Investment Authority

Library trust funds are overseen by the Library Board of Trustees. An elected Treasurer and Chairman of the Board are empowered by the Board to act as agents to expend funds and execute tasks associated with day-to-day management.

Reporting

The Treasurer of the Library Board of Trustees will report on the value and growth of Library Trust Funds and transaction history at regular board meetings

Investment Policy Points

  1. We intend to budget such that all monies taken in through copies, fines, coffee sales and interest collected from the monies managed by the Trustees of the Trust Funds are spent purely to supplement the library’s operating budget. The operating budget should be funded by the town.
  2. Any monies not specified for immediate use in the budget will be reinvested in funds.
  3. Given the library’s strong financial position due to prudent management, our investment time horizon for our investments is long-term (over 10 years).
  4. We need liquidity, by maintaining a cash position and/or a short-term money market. The remainder of assets can be invested in US equities or bond funds.
  5. As a board, we agree to invest in a broad, diversified portfolio.