Hong Kong Monetary Authority interviews Privé Technologies


Vibrant, diverse and efficient – it’s clear that Hong Kong embraces fintech and is ramping up to be a world-class fintech hub. With that said, we are proud to be part of this exciting landscape and to have shared our thoughts with Hong Kong Monetary Authority (HKMA) in a recent interview. 

Honoured to be placed amongst leading industry players such as FinTech Association of Hong Kong, Hong Kong Exchanges and Clearing Limited (HKEX) and Invest Hong Kong, check out the video below to hear what Julian Schillinger, Co-Founder & CEO at  Privé Technologies has to say on why Hong Kong is an ideal place for fintechs!

Hong Kong is the regional hub and it allows to hire the best people through its diverse culture. It’s a well regulated international booking centre and a gateway to China. 

- Julian Schillinger, Co-Founder & CEO

Fresh Updates on The Platform

The Privé platform has always been built to cater to your business needs, which is why we are truly thankful for all the thoughtful client feedback that have been shared with us over the years.

We’d just like to say… we hear you and we would like to announce some updates that are coming your way:

New Navigation UX

Introducing a new navigation UX, the platform now provides greater value with a client or account-driven user journey across the platform. Rather than being module-driven, the new upgraded side panel navigation has been aimed to maximise efficiency.

Clean New Look

Showing off a cleaner design, the platform has been given a fresh facelift! Some of the changes you will notice might include new modern icons, better illustrations and a seamless design language.

Revamped Portfolio Reporting Tool

When time is of essence, we aim to help you make the most out of it. With an improved data processing speed and interface, benefit from better efficiency with intuitive features and rapid data execution.

Episode 01 – Julian Schillinger – Prive Technologies – Building Wealth Through Technology

Wealth, Podcast, Technology, Asian Fintech

Michael, Qiuyan and Julian talk about banks’ technological adoption during the past fifteen years and what it has meant and will mean for executives, customers, HNWI.

In addition, the conversations goes in depth on how FinTechs can ensure that their business is aligned with the existing market as well as how Privé Technologies product suite allow banks, EAMs, insurers, and others to take a holistic approach on wealth management with technology that covers everything from client outreach and information to wealth planning, robo-advisory, portfolio optimization and much more.

In movies like Terminator and Robocop, a lot of people believe that the terminator modules are machines in humans but, we believe in something that we call Bionic-Advisor in Privé Technologies. 

Structured Products Part 2: What are the risks of Structured Notes and how does it affect your Portfolio?

The term “Structured Note” does not provide much information about the nature of the product. A “Note” has similarities with bonds: its valuation cannot go below $0, and it has credit exposure to the note issuer (i.e. you may lose all your capital if the issuer collapses, think Lehman Brothers). “Structured” product could be principal protected (that means you will minimally get back your capital) or highly leveraged (and you may lose all your capital). The tenor could be 1 month, 10 years and longer, the underlying could be commodities, FX, equities, indices or funds.

When an investor is looking at the prospectus of a new type of Structured note, the first challenge is to understand the features of the payoff, how the product behaves in different market scenarios, and what the main risk factors are. Even simple products can reveal a high level of complexity.

Let’s look again at the example described in Part 1 of this series:

Tenor: 3 months
Underlying: Stock ABC
Reference Price: Stock ABC $10
Strike Price: $8
Coupon: 12% p.a.

Recall the two scenarios at maturity for this structured note:

Scenario 1: If ABC falls below the Strike Price of $8, you will get a coupon of 12% p.a. (which works out to be  3% for a 3 month structured note) and you have to buy $10,000 worth of that stock at $8 regardless of where the stock is trading at.

Scenario 2: If ABC closes above the Strike Price of $8, you will get your $10,000 back plus a coupon of 12% p.a. (which works out to be  3% for a 3 month structured note) of $10,000, totaling $10,300.

If we were to break this down further, this product can be replicated by having the following in a portfolio:

  1. Buy a 3 months bond and
  2. Sell a 3 months put option on ABC with a strike at $8.

Why is the coupon paid by ELN higher than that of a typical bond or deposit with the same issuer and maturity? By replicating the portfolio, we can see that the investor is, in fact, selling a put option on ABC stock to the note issuer, and is compensated for the risk by receiving a higher “premium”.

Going one step further, an ELN can be seen as a hybrid product, combining an equity component (the put option) and a fixed income component (the bond), within the same note.

The next important factor for the investor to decide is whether the product would fit the objectives of his or her portfolio. Total risk exposure, stress scenarios, and performance backtesting are common analysis used to monitor the different risks of a portfolio. To calculate these numbers, it requires a multi-asset portfolio management system, further integrated with a derivatives pricing engine, which are technologies generally only available to institutional investors.

Access to the models and technologies mentioned above can provide investors with better insights and clarity on their investment decisions.

At Prive Technologies, we hear the challenges which investors of structured products have highlighted and have built an innovative solution that aims to provide transparency and accessibility to both advisors and investors. With the right access to information, structured products can be a real value-add to one’s portfolio, and no investor should be deprived of that.

Structured Notes Part 1: What are they and how it works

Without getting into the technical details, the typical structured note sold in Asia is a financial asset (like a bond or stock) whereby the risk & return behaviour may mimic a bond when the product is performing well and conversely, it behaves like a stock when the product is performing poorly. Structured notes are commonly sold in banks in Asia, especially to service affluent and high net worth investors. In the retail or consumer banking space, it’s usually termed as “Structured Deposits.”

A structured note can be customisable in many different ways depending on the investor’s preference and risk profile. Think of it like a do-it-yourself pizza where you can put whatever components (called the underlying) you fancy. Depending on what your taste preference may be and who the pizza chef is, the pizza will be priced (the strike price or the coupon) differently.

The final payout of your structured product investment is dependent on the performance of some underlying instruments. Below is an illustrative example.

If you were to buy $10,000 worth of the following structured product:

Tenor: 3 months
Underlying: Stock ABC
Reference Price: Stock ABC $10
Strike Price: $8
Coupon: 12% p.a.

There’s a lot of jargon here, but this means at the end of 3 months:

Scenario 1: If ABC falls below the Strike Price of $8, you have to buy $10,000 worth of that stock at 8$ regardless of where the stock is trading at.

Scenario 2: If ABC closes above the Strike Price of $8, you will get your $10,000 back plus a coupon of 12% p.a. (resulting to 3% a Tenor of 3 months) of $10,000, totaling $10,300.

In this case, the risk here is in Scenario 1 where the stock falls way below $8. Generally, you should only buy this structured product if you have the following view:

  1. You take the view that stock ABC will not fall by more than $2 in 3 months.

  2. You fundamentally like the stocks and believe that they are potentially long term assets you want to hold on to. Such that, even if scenario 1 were to happen, it would not change your long term view on this product and are okay with a short term loss.

The details of a structured note can vary in its underlyings, terms and pricing levels. It is important that you know the details and risks of the product well, and the various scenarios that might play out. Structured notes are typically sold via financial advisors in banks, so be sure that your advisor is clear in explaining them to you.

If there’s one thing to know about structured products (or investments in general) is that there is no such thing as a free lunch. For every seemingly good “benefit” that you are receiving, know that there’s also an equal amount of risk you are taking at any particular given point of time.

At the end of the day, it’s never a question of whether this structured product is good or bad, but whether the risk/reward factors are aligned with you and your views.

In Part 2 of our Structured Note series, we’ll talk a little more about the risks associated with structured products and when might be a good time to have them in your portfolio.

Financial Literacy: An Introduction (Part 1)

Financial literacy has many definitions. One of our favourite ones is knowing how money works, and how you can put money to work for you. Others define it as how well one can understand budgeting, and apply financial prudence to life decisions.

In general, financial literacy refers to how well one can manage their financial resources effectively throughout their life, and how well they are able to plan for their financial goals.

Why is important for us to be financially literate? 

Research studies across countries on financial literacy have shown that most individuals (including entrepreneurs) don’t understand the concept of compound interest and some consumers don’t actively seek out financial information before making financial decisions. Most financial consumers lack the ability to choose and manage a credit card efficiently, and lack of financial literacy education is responsible for lack of money management skills and financial planning for business and retirement.


Finances are an integral part of our life, and many of the decisions we make on a daily, monthly and yearly basis either affect our finances directly, or revolve around the subject of finances. The way we understand and approach finances can have a huge impact on the decisions we make in many areas small and large, from food and lifestyle choices, to career and family matters.

The consequences of good or bad decisions compound by the day. When the dimension of time is factored in, the good gets better and the bad gets worse. Good investment plans can gather handsome compounding interest, while uncurbed bad spending habits might do the exact opposite with debt and bills.

Being financially literate also helps us in preparing for the future like family planning and retirement, though they might not feel as important at present. There might also be times when we are caught unaware by circumstance, for example not being covered by insurance for hefty hospital bills. Decisions like these have to be made way beforehand, so it pays (literally) to be well prepared.

Having discussed how important financial literacy is, let’s play a quick quiz to get a gauge of where you’re at.


Are you satisfied with your score? Did you predict your score correctly?

Pause and have a moment to reflect. Did you underestimate or overestimate yourself? Why do you think that was so?

If you feel your financial literacy needs improvement, here’s an infographic we made with some tips to get you started!


In our next article, we will show your results compare to the rest who have taken this quiz.
We’ll also go deeper into the main areas you should be mindful of to improve your financial literacy.

This content was brought to you by our partners, Hive Up. Do remember to sign up for their mailing list if you haven’t already, so you won’t miss out on new content!


Financial Wisdom in Delayed Gratification – Part 3

In Parts 1 and 2 of this mini-series, we introduced the concept of instant and delayed gratification, and how it has possible implications on our decision-making and finances. Join us today for the 3rd and final part of this series, where we discuss practical steps on how to improve our financial self-awareness and avoid the pitfalls of instant gratification. (If you have not read Parts 1 and 2, it would be great if you did to benefit best from this series.)

Financial prudence seems simple in theory. Spend as little as you can, save as much as you can, and invest as wise as you can. But like we said, that’s in theory. We need to admit that as humans, we have emotions and vulnerabilities, and sometimes our behaviors can differ from our original intentions.

As we mentioned in Parts 1 and 2 earlier, the solution to better financial decision-making lies in tipping the scales in being less emotional and being more numerate and rational. When we are better aware of the pitfalls of instant gratification as discussed, it will aid us greatly in the plans we make to improve. To improve our chances in mastering delayed gratification, here are 4 steps to follow.

Step 1: Get your priorities right

A big reason why we struggle with delayed gratification is that, the future does not seem as real and tangible as the present. We must put effort into imagining the greater rewards we want to wait for, if not they will seem vague. We need to put our brains to work — visualise and extrapolate the circumstances vividly in your mind’s eye.

Consider, to the point of iron-clad conviction, our financial goals in the order that we deem most important. Ensure that our basic and foundational needs are settled before tackling the fancier “good-to-have” ones. Determine for ourselves, if retirement and insurance should take precedence over the fancy sports car, or if our children’s education is more important than our current spending lifestyle.

Step 2: Materialise your plans

Writing down our goals and plans are a great way to make our thoughts and intents tangible, and will help much with decision-making when the rubber meets the road. Detailed lists and comparison tables can be fantastic. Spreadsheets are extremely helpful to do calculations especially in the context of time. Contextualise your goals, work in the details, and be sure to track them.

Step 3: Never Rush

Patience is key. Whenever we are faced with a decision, don’t be pressured to act on instinct. Wait. Take time to let the heat of impulse diffuse. Always take a step back and consider different perspectives and alternatives. Refer back to the plans we have made earlier, instead of being reactionary.

If we find ourselves struggling with this, it may mean our convictions and plans are not strong enough to affect our behaviour. Do repeat steps 1 and 2. Be humble and bounce our plans off with people whom we trust and know have our best interests at heart. They could offer a different perspective and prevent tunnel vision.

Step 4: Commit

Put your money where your mouth is. By putting your savings and investment plans into action, it forces you out of procrastination to be accountable. Take that step to start the realisation of your financial goals by speaking to your financial advisor or wealth manager. The earlier you do this, the sooner you reap the benefits of time. (Remember the effects of compounding interest we explored in the quiz in part 2?)

In conclusion, let’s go through this checklist to see if you have the main areas covered.

We truly hope this article has been helpful in continuing your journey of mastering your finances. Do you have thoughts and ideas what you would like to share? We would more than love to hear them!

This content was brought to you by our partners, Hive Up. Do remember to sign up for their mailing list if you haven’t already, so you won’t miss out on new content! 

Financial Wisdom in Delayed Gratification – Part 2

Delay, Gratification, Investment, Investing, Privetech

Does choosing between instant or delayed gratification have an impact on our finances? In our previous article, we introduced the definitions and what factors may cause us to lean towards one or the other (click here to read).

Today, we will be diving deeper into the financial implications of instant versus delayed gratification, and learn more if it directly affects our decisions in the areas of loans and investments. But just before we do that, let’s take a look at the results of the quiz in Part 1. Which category did you fall under?

Delay, Gratification, Investing, Investment, Privetech

It seems that a good number of us came under the balanced category, and more of us lean towards delayed gratification over instant gratification. The question now would be, would our decisions be similar when applied to finances? Let’s find out later.

Loans & Debt

Instant gratification can make us want things immediately, even when we can’t afford it. When we decide we cannot wait for the day we can finally afford it, we choose to take on loans and by doing so, enter the world of consumer debt.

The Federal Reserve Bank of New York reported a total household debt of $13.29 trillion in the second quarter of 2018. That is a lot of debt. Granted, there are some loans that are legitimate and can be useful and timely when used wisely. A study loan might enable one to get the correct qualifications and skills to kickstart a career with a higher starting income.

But loans also can be a double-edged sword if we are careless with them. We need to understand the effect of interest rates, and should strive to benefit from it with savings plans and investments, rather than struggling to pay back the loans we take (and the interest with it!)

When we get into debt, we are taking our money that we earn in the future, to pay for our expenses today. Is that wise in a financial sense? Can we justify with good reason, the purchases we make and the difference it makes to our credit scores?

We should take a step back, and reflect on the loans we currently have or are considering to take on. Are they truly necessary? Most loan providers spend good money on clever marketing, because they know humans are emotional and impulsive, so hence may give in to instant gratification. In order to overcome that, here are 3 areas we need to reflect on when considering loans

1. Wants vs Needs:

Do we really need to make this buying decision? Is it always about getting the bigger house, a nicer car, and more luxurious vacations to top our experiences? Extrapolate, and visualise ourselves having all these things and ask, when is enough, truly enough? How long would these things make us really happy for? A year? Maybe 5? Maybe 20? How certain are we?

2. The Time Factor:

Cognitive psychology tells us that when most people take a narrow view in making decisions, it might be because we tend to give more weight to the situation or problem, when it presents itself as the only problem at that point in time. But if we were to step back a little, and look at the problem in its recurrence and effect over the course of time, our attitude and the way we think about the problem could be fairly different.

Ask ourselves, do we really need this now? Could we wait for a better deal and allow our money to continue accruing interest while we wait? Is this the correct time to buy or are we being peer-pressured to follow a hype?

3. Alternatives and True motives:

What alternatives can we have that are less costly? Are there emotional or cognitive alternatives to replace our wants? Learning a new language or picking up a musical instrument might be much more prudent than the lifestyles or hobbies that we want to associate with being wealthy and famous. What are our true motives? Do we really love that $50,000 watch or do we just want others to perceive we are successful? Can we honestly admit to ourselves we are in no way affected by consumerism?


A key factor in mastering delayed gratification is the ability to be patient. Charlie Munger, a key business partner of Warren Buffett, once remarked “It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.”

This is indeed true in the world of investing. Most seasoned veterans would advise that the lack of patience causes many an investor to make mistakes. It is needed especially in sticking to the wisely calculated and planned strategy, instead of being over-reactive to market movements and news chatter.

The lure of instant profit is something not easy to deal with. We live in a world where we are conditioned to get things at the snap of our fingers. This is especially so when our society today is one with conveniences never possible a mere decade or two ago. From the food we eat, the services we use, and the multimedia we can command at demand, the norm of getting what we want, when we want it, has changed drastically by the power available at our fingertips today.

Every product shouts “Better! Faster! Now!” We are bombarded with the lure of rare and time-limited discounts, and investment opportunities that try to make you feel privileged and lucky. There are even some robo-advisories that claim they can beat the market. Are they really telling the truth, or could they be traps that take advantage of our impulsive tendencies to instant gratification? If we were to conscientiously take a step back and wisely consider, the math and statistics might tell a very different story. We need to do our research and investigate the facts, especially when some financial products promise returns that are too good to be true.


Before we go on, let’s give this quiz a go. They are of course hypothetical scenarios, so don’t try to think too much about them. Instead, go with your most natural choice and let’s see where that goes.

Were you surprised at your results? When you were attempting the quiz, did you consciously think about how much savings you could have accrued? Or was it more of an afterthought when you saw the results of the quiz? Now that you’ve taken to mind the power of compounding interest, would that be something that will affect your purchasing decisions henceforth?

Be sure to look out for our final part of this mini series as we tie everything together and discuss practical solutions to improving our financial decision making. This content was brought to you by our partners, Hive Up. Do remember to sign up for their mailing list if you haven’t already, so you won’t miss out on new content! 

Financial Wisdom in Delayed Gratification (Part 1)

Instant gratification generally refers to the impulsive decisions we make for the sake of immediate pleasure. It’s about getting exactly what we want, right when we want it. In contrast, delayed gratification is the ability to resist those impulses for immediate pleasure, in order to receive something better in the future.

Do we choose to satisfy our sweet tooth, or reap the benefits of a healthy eating plan? Do we hit the snooze button to enjoy an extra hour of blissful sleep, or wake up and commit to our fitness regime? Is the fancy pair of shoes necessary right this second, or is the money better suited for a more worthwhile investment?

We often battle with similar choices everyday, and these decisions often boil down to choosing between short-term satisfaction or being able to wait for long-term benefits.

Would you like One Marshmallow or Two?

Instant versus delayed gratification is an interesting psychological concept in decision-making, and is illustrated in a famous study called the Stanford Marshmallow Experiment. Walter Mischel, a psychology professor at Stanford University, conducted a study on children using marshmallows or treats of their choosing. They were given their favourite snack and had a choice to eat it there and then. They were also told that if they were to wait for a short while of 10-15 minutes and resist eating their treat immediately, their treats would be doubled.

Mischel went on to follow-up with these children much later on, and noted some interesting correlations. His reports, which were consistent with other recent studies, showed that those who opted for delayed gratification instead of choosing to be instantly gratified had:

  • Better academic scores and intelligence
  • Better social skills and sustained marriages
  • Higher income and better financial health; and
  • A lower probability of health issues (i.e., obesity and drug abuse)

Is it difficult to wait for a larger reward, or benefit by forgoing an immediate one? Why do some of us struggle with wanting to be instantly gratified when it comes to making decisions?

Our brains are usually conditioned to naturally choose pleasure and comfort, as well as to satiate our dopamine levels. Logically we understand it may not be the best choice, but we consciously and even sometimes subconsciously, do not want to experience the psychological discomfort associated with denying ourselves the instant reward. Sometimes, there is also the factor of probability — we are afraid we might lose the chance of getting the reward if we don’t grab it now.

Implications on Our Finances

Both instant and delayed gratification have important consequences when making financial decisions. Which end of the spectrum one leans to can be a key factor in determining one’s financial success or failure.

Daniel Kahneman, a Nobel-Prize winning psychologist known for his work in decision-making, behavioural economics, and prospect theory. He gives an interesting perspective of the implications of decision-making and its effects when it comes to finances.

Kahneman suggests that as humans, the weakness of decision-making often occurs because we are more emotional than numerate, especially when it comes to mental accounting. He notes that people tend to save and borrow at the same time, instead of treating their whole portfolio of assets as one whole.

People tend to do this because they keep their money in different mental accounts, which they have different rules for. This may not be a bad thing if the math was done right, but people often have a hierarchy of these mental accounts that tend to favour emotional desires, as opposed to the more practical and numerical needs.

If we are more prone to instant gratification, we might splurge on the latest gadget or fashion that’s on sale. We choose to only worry about the credit card bills later on. Perhaps we feel we deserve to splash our money on a luxurious vacation, instead of saving it for our children’s education. We might be tempted to heavily invest in a stock or financial product without taking the time to do proper research, due to peer pressure or us not wanting to miss out on the hype and the “rare opportunity”.

However, if we are more prone to delayed gratification, we tend to take more effort to take a step back, reflect, and consider the future aspects of our decisions and their consequences over time. We will be exploring the intricacies of what affects the choices we make and how to take better control of them later on.

Right now, let’s play a quick quiz to find out more about our own personal gratification habits. Try not to think too much into the scenarios. Be honest with the answers that naturally come to your mind, that are consistent with your everyday decision-making. Ready? Let’s give it a go!

Were you surprised with your result? Let us know what you think! Join us in the next instalment of this series to see how your quiz results compare with others.

Learn how your decision-making affects your financial decisions as we dive deeper into exploring the areas of loans and investments, and how to safeguard ourselves against common pitfalls of instant gratification.

Did you learn something from this article? Like and share it with your friends!
This article was brought to you by our content partner Hive Up.

5 Key Considerations When Rebalancing Your Portfolio

The asset allocation strategy that you adopt plays an important role in determining your success as an investor. The first step, of course, is to understand your risk tolerance. Are you the type who panics when the stock that you have purchased in a certain company falls by 10% in value? Or do you see this as an opportunity to buy more of the stock?

When you understand your risk profile, you can arrive at an asset allocation strategy that meets your requirements. If you are an aggressive investor, you may decide to invest 80% of your capital in stocks and the remaining in bonds.

An individual who does not want to take on so much risk could opt for a 60/40 balance between stocks and bonds.

However, regardless of the asset allocation that you decide upon, the relative proportion of your investments in stocks and bonds will change over time. An increase in stock market valuations will lead to your portfolio becoming weighted towards stocks.
Conversely, a fall in the stock market will result in your bond holdings exceeding your pre-decided percentage. When this happens, it may be time to rebalance your portfolio.

Remember that rebalancing is about managing risks. If your stock holdings grow as a percentage of your total portfolio, it leads to an increase in the level of risk that you carry. An excess of bonds will lower the risk that your portfolio is exposed to but will limit growth.

Rebalancing has another important benefit. It forces you to sell high and buy low. But before you start this rebalancing exercise, here are a few points that you may want to consider:

# 1: It isn’t a yearly exercise

Rebalancing your portfolio in the same month every year is not really the best approach. While it’s better than not carrying out a review at all, there is a better way to address this issue.

You should keep a close tab on the composition of your holdings. If your original stock-to-bond ratio is 60/40 and rising share valuations take it to 65/35, it may be time to rebalance even if only six months have elapsed since the last exercise.

Rebalancing when the stock market falls can be especially beneficial. A study carried out by US fund management group Vanguard found that investors who followed this practice in a bear market gained a distinct advantage. They bought equities at depressed prices, a step that resulted in large capital gains.

What if you don’t rebalance your portfolio at all? The Vanguard study, which examined US stock market data from 1926 to 2010, reported that a 60/40 portfolio would have been transformed into one that held 97% in equities. While this may suit a person with a high level of risk tolerance, it is definitely not the type of portfolio that a conservative investor would like to hold.

# 2: Deciding what to sell

If your stocks have outperformed your bonds, you will have to dispose of some stocks. The proceeds will need to be re-invested in fixed income securities. But how will you decide which stocks to sell?

This can be a big dilemma for investors. The very fact that you need to sell stocks indicates that your equity holdings have performed well. You may think that your stocks still have the potential to increase in value. You don’t want to be in a situation where you sell the shares of a particular company only to see the price shoot up subsequently.

There is practically no way to ensure that this does not happen to you. But there is a certain method that you can adopt as a precaution. Review your equity holdings and see if you would be willing to purchase the shares that you own at their current prices. Every stock that meets this condition should be retained. You can consider selling the others.

# 3: Don’t overdo it

Rebalancing is not really required if your stock-to-bond ratio changes by 1% or 2%. A good rule of thumb to follow is to carry out the rebalancing exercise when the shift is about 5%. Making the change at 10% is also quite acceptable.

Don’t be in a hurry. A short-term price movement may prompt you to rebalance your portfolio. But if you change the mix of your holdings too quickly, you may need to rebalance once again when the market reverts to its prior level. Additionally, selling your stocks in response to a rise in prices may lead to the loss of future gains.

#4: A measured approach is preferable

It’s important to differentiate between short-term volatility in the stock market and a more permanent shift in the market’s direction. But it can often be difficult to do this.

If you are not sure if prices are rising because of the start of a new bull market, should
you rebalance your portfolio? A good approach to this type of situation is to rebalance in phases. You could consider carrying out the exercise over two or three months. In this time, it is likely that you will get greater clarity about the market’s direction.

#5: Has your risk profile changed?

Conventional wisdom says that as you age, you should move more of your investments to safer fixed income securities. While this rule does not apply to everyone, it is a good idea to review your risk tolerance periodically. If you have to pay your children’s college fees or if you have to support your parents, you may not be willing to expose your investments to great volatility.

The next time you carry out a rebalancing exercise, see if your existing stock-to-bond ratio meets your requirements. If it doesn’t, you should reapportion your investments accordingly.


It’s important to remember that rebalancing carries a cost. Every time you buy or sell a financial security, you will have to incur trading expenses. If you rebalance too often, these can add up to a significant amount and reduce the rate of return on your portfolio.

The best option is to rebalance by buying new securities with cash. This will save on costs and help to build your portfolio. However, if you cannot do that, then you will have to adopt the traditional route of selling some securities and reinvesting the proceeds.

PrivéTech Team

The Privé Technologies Team