If you know a bit math and some investment theory you can make money. This can be a very competitive opportunity, and if you are good you will make more money and a fancy career. This guest post by Laura Jimenez is a bit strange. It was written long before it was submitted to me, so I had to modify it myself. I used to help an investment bank a decade ago, but I do different things since.
Remember the 2008 financial crisis? The economic sectors across the world got a lot to learn from it and were propelled to change their approach to avoid any similar situations in the future.
We’re already aware of finance being one of the most promising fields with the career options it provides and how it helps you in your personal finances as well. However, the need for robust financial systems and better risk management has skyrocketed the demand for quantitative analysts over the years.
Quant finance involves finance, math, statistics, and computer science in different proportions. If you have a Quant Finance qualification or are planning to take it, here is what it can offer:
With a Quant Finance qualification, you gain a skill set that prepares you for intellectually challenging jobs. You can flaunt your complex problem-solving skills to potential employers in an interview as they look for candidates with such abilities while working under pressure.
Careers in the finance industry require research, data analysis, mathematical model building and implementation, as well as general financial knowledge, etc. This field requires you to work well in an unsupervised environment and produce quality work. As a result, you get jobs based on knowledge, dedication, and merit, which a quant finance qualification provides.
The good part: you can be a freak, nobody cares. The bad part: you kind of need to do everything yourself. You need to hypothesize some unique dependency in the data, prove your hypothesis on historical archives, and then your ideas will compete against ideas of other very smart people. If you are not good enough or not motivated, there is no place for you in that game,
Besides giving intellectually stimulating jobs, a Quant Finance qualification helps you land a job that pays well. The financial sector already has high salaries. Due to the complex nature of a quant analyst’s position and the eligibility criteria, such employees are very well paid.
Furthermore, financial centers like New York, London, Paris, and Hong Kong are the main hubs for quantitative analyst jobs. These places generally pay higher average salaries compared to secondary cities.
For instance, the average salary of top earner quant analysts in New York City is over US$ 125,000 per year, while that for those in Houston is over US$ 122,000 a year.
Now, you can develop algorithms for an agency or invest on your own, but not both. You will have to sign documents about it. Moreover, quant is often an entry-level job in the financial world. A portfolio manager for example may get a significantly higher salary, x10 if he is good. Promotion will be tricky. If you invest your own money, the competition is not a problem, but data access and operations can be expensive. Leveraging and enough capital to actually justify an independent activity may define your area of research. Maybe if you trade cryptocurrency, this is not an issue, but then the legal aspects may matter…
The finance field is led by continuous change, and securities have become more challenging to handle. As a result, specialists’ demand and worth have increased because they understand how security prices work and can use that to make profits and lower risks.
Additionally, quant analysts are more in demand because automated trading systems and hedge funds are also becoming popular.
Furthermore, the 2008 financial crisis also highlighted the challenges that hinder the progress of modern businesses, resulting in significant reforms to avoid recurrence. Regulatory authorities expect the financial sector to report risk transparency. At the same time, investors need protection for their investments with better risk management.
Consequently, a lot of work has been done in the industry to match the optimal regulatory standards, leading to more demand for quant analysts who are specialists in managing risk.
As finance models and predictions continue to become more sophisticated, the job opportunities for quant analysts continue to increase further. That’s because of the higher focus on big data analytics, data science, and FinTech. If you have a Quant Finance qualification, you can definitely expect better opportunities in this field because the need for such skills is more than ever right now.
In 1980 pattern traders were real people, flesh and blood. A decade ago, algorithms were doing increasingly large volumes of trading each year. Today AI algorithms are slowly taking over more traditional algo trading. The demand constantly shifts, and you will need to acquire new skills both in the economy (math) and in programming.
As discussed previously, there are specific necessary skills that employers look for in quant analysts to match up with the growing demands of the sector. However, you are in an even better position with a quant qualification if you have learned good math and communication skills.
A quant analyst job may sound very boring to people, but it actually requires extraordinary social skills. It’s not just about being highly analytical and be great at crunching numbers, but you should also be able to demonstrate your findings in an easy-to-understand manner.
You can build clever models, but if you can’t communicate them effectively to the management, they probably won’t be implemented.
A qualification in quant finance teaches you the importance of these necessary skills, which employers actually look for so they are able to understand and implement the models you come up with.
Additionally, quant finance makes you a pro at handling complex software and manipulating databases with the help of programming and math skills. These talents are taught as part of the qualification so you can build quant models, working in tandem with the tech staff.
Even though employers have varying job requirements, most companies use C++. Sometimes employers might also expect you to know SQL, Python, Java, R, and .NET, as well as exceptional Excel skills. When you learn programming languages as part of your quant finance qualification, you develop a unique approach to finance and have a compelling new skill that looks good on your resume.
This is a requalification possibility for young engineers, programmers, mathematicians, and economists. For an engineer to learn economics is easier than for an economist to acquire all the necessary hands-on skills. If you have a PhD, you are likely to be approached by one of the bigger trading companies and offered on-the-job training. This is a viable option.
The financial sector is a highly rewarding one, not only when it comes to sharpening your intellectual skills but also with the monetary benefits it provides.
With the integration of technology in the financial sector, there is now a greater-than-ever demand for quant analysts. That’s why a quant finance qualification is a great choice for anyone who wants to understand the statistical and mathematical workings to keep up with the changing needs of this sector and come up with clever models and solutions.
If you want a lucrative career in the financial sector, then take up our top quant finance programs and learn from the experts. They are here to teach you all the necessary skills at your own time, so you can earn a relevant qualification online and land a job that pays well.
And if you leave the financial markets, you can manage and invest more effectively your own capital.