GFOA recommends that governments have an Investment Policy that considers:

The reason that considering the inherent risks associated with investments is emphasized in creating an Investment Policy is due to the fundamental need for governments to safeguard public funds while maximizing returns in a responsible manner. Inherent risks can include market volatility, interest rate fluctuations, and credit risks associated with various investment vehicles. Addressing these risks allows governments to develop a strategic approach to investments, ensuring they are aligned with the overall financial objectives and risk tolerance of the institution.

Additionally, awareness of inherent risks ensures that investment choices are made with a strong understanding of potential impacts on financial stability. This proactive assessment helps mitigate the chances of significant financial loss, thereby protecting taxpayer dollars and promoting fiscal responsibility.

While political contributions, user satisfaction surveys, and public opinion on bond proceeds might provide context for certain financial decisions, they do not directly influence the core requirements of a well-structured Investment Policy designed to manage and assess investment risks.