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Choosing the paint for the text
An exterior trim paint is good for text. That will be thicker and more durable than a paint intended to cover a whole wall. The kind I use is Advantage 900 from Porter Paints, which operates under the name PPG in some areas. It is a nationwide distributor in the USA. There are others that do the same thing, but what is good about this one is that even though it cleans up with water, it can be applied over an oil finish. That makes it possible to treat the pole with deck stain prior to painting the text, as discussed below. So all the wood, even under the paint, gets the treatment. And that treatment works like a primer for the text, creating a smoother and less absorbent finish for the text paint.

Trim paint is available in quarts in many colors, but I used Ultra Deep Base Advantage 900 mixed to Onyx Black color for most of my peace poles.

Preserving the wood
Wood needs to be protected from the sun. UV rays from the sun break down wood just like they break down your skin. Deck treatments work like a suntan lotion to prevent the sun from breaking down the cells in the wood. And, like a normal suntan lotion, they need to be reapplied every so often. A coat or two of deck treatment goes on before the text is painted, and then every couple of years after that another coat of some kind of deck treatment should be rubbed on with a rag or brush to continue protecting it from the sun. If you have a deck, the schedule could be to rub on the peace pole a coat of whatever you use on your deck whenever you treat your deck. It will last a long time without that, but it will last longer with it.

Porter makes a deck treatment that can be used on cedar, redwood, pressure treated wood and untreated wood. It's called PorterDeck. It is a stain and a preservative. I was working on cedar and used the color they call "Natural" which gives it a slightly darker color that people like. 

It might be that many deck treatments other than Porter's would do the job. It has been years since I tested them. I tested them for my own purposes without thinking that I was going to be telling others "how-to" information and lost track of the results. But after you prepare the wood, doing whatever sanding, cutting and template outlining you are going to do, use a deck treatment on it, and then paint the text on last.

I'm not a big fan of varnish or urethane because of how bad those finishes look when they start to deteriorate, and how much work they are to clean up when they start to deteriorate. But deck treatment just wipes on and doesn't become unsightly when it eventually is gone. After it is, it merely needs to be wiped on again, right over the text.