Choosing the best college degrees for investing and stock trading (stockbroker schools) largely depends on your career of choice. It also compels future investors to acquire financial education that is more specialized and comprehensive.
If you are in the middle of choosing your college degree, and you have your eyes set on stock trading and investing, there are some things you need to learn as you advance your way towards college.
Investing is a great way to take smart risks and make money. You can work for yourself or be employed by a firm, offering flexibility. Many investors eventually become their own bosses and setup their own shop after proving themselves with a first job at an institution. But to get that first job, you’ll need a solid financial degree. The salary for an investor has no ceiling with entry level investors making five figures and hedge fund owners making billions.
- The 10 Best Colleges for Becoming an Investor
- Undergraduate Degrees for Investors
- 10 Skills Every Master Trader and Investor Should Possess
- Key Takeaways
Will the university you attend matter?
When pursuing a career within the finance field, will it matter which university you attend? The best high-powered investing and trading careers are usually linked with those Ivy League Universities. This somehow holds, especially if you are keen on working on Wall Street. However, there are also very good colleges and universities that have produced successful graduates in trading and investing.
The 10 Best Colleges for Becoming an Investor
Along with other elite liberal arts schools and Ivy League Schools, Amherst College is constantly targeted by top finance firms. This college is one of the top five liberal arts colleges in the US. While the school has no finance major or business programs, its economic department, coupled with a solid alumni network, has made the school a premier choice for students who wish to obtain a degree in mathematics, statistics, or economics.
Located in New York, the financial engineering program of Columbia University falls under the Department of Industrial Engineering and Operations Research. You can choose any of their four concentrations: finance and economics, derivatives, computation finance or trading systems, or asset management.
The programs are further divided into two halves. The first half starts by deep diving into the many tools of the trade and understanding how you can make financial market instruments and models.
They focus more on optimization, stochastic processes, numerical techniques, data analysis, and Monte Carlo simulation. The second half is where in-depth classes are made, and it focuses more on learnings about term structure interest rates, financial engineering programming, or market volatility.
In 2013, Columbia University produced and secured 100 percent of its graduates inside top financial firms. Hiring companies included AQR, Barclays Capital, AXA Equitable, BNP Paribas, BlackRock, Bloomberg, Credit Suisse, Citi, Deutsche Bank, JP Morgan, Goldman Sachs, Nomura, Morgan Stanley, UBS, Societe Generale, among others.
The financial engineering program of Cornell University is offered at its College of Engineering thru the School of Operations Research and Information Engineering (ORIE). The final semester of this program is called Cornell Financial Engineering Manhattan (CFEM) and happens on Broad Street in New York’s financial district. The best part about this program is its proximity to Wall Street, a critical factor for networking and finding the best internships.
CFEM is proud of its video system wherein its lectures and seminars are broadcast between its main upstate campus and the Manhattan campus. Their lecturers come from top Wall Street firms, and the campus claims that their curriculum is annually updated to keep up with the changing demands of the financial services industry.
Students are highly encouraged to join a summer internship before their third semester. The internship exposes them to the actual work in Wall Street firms and gives them access to the university’s Center for Advanced Computing grid network.
The Harvard Business School in Cambridge, Massachusetts, practices what they call the case-method learning, coupled with a hands-on Field Immersion Experiences for Leadership Development (FIELD) course. This is designed to put a student’s leadership skills into practice thru personal reflection, hands-on experience in creating and launching a microbusiness, and global immersions.
This school is known for its unparalleled resources and amazing alumni networking possibilities. Within the HBS is a finance unit, plus access to MIT’s curriculum so that students get the chance to put their focus on mathematical finances within the whole business program.
In recent years, hiring graduates during the first three months of their graduation has increased from 87 percent to 93 percent. Graduates who prefer to secure finance positions are around 35 percent of each graduating class on average.
Massachusetts Institute Of Technology
MIT’s School of Business Cambridge in Massachusetts is proud of its being the pioneer in the finance and quant trading field. Their Master’s in Finance is a single-year program that starts with an intensive summer workshop in corporate accounting and finance theory.
This is then followed by collaborative projects focusing on dealing with real-world problems. The MIT/Sloan program allows the students to continue their interests within the school’s academic program.
For the past years, finance graduates of MIT are placed at different top finance companies like AT Kearney, Bank of America, Applied Predictive Technologies, BlackRock, CITI, Boston
Consulting Group, Credit Suisse, Deutsche Bank, Deloitte, JPMorgan, Goldman Sachs, Oliver Wyman, Morgan Stanley, UBS, and State Street.
New York University
The Courant Institute of Mathematical Sciences/MS of Mathematics in Finance of New York University only accepts 10 percent of its total application from all across the globe. This program has a strong pragmatic component, and its courses are rooted in student mentoring and practical applications by finance professionals.
The curriculum comprises five hubs: financial theory and modeling, computational training, financial applications, mathematical tools, and real-life training. All the classes focus on derivatives securities, risk, and portfolio management with econometrics.
They also offer electives like quantitative strategies, algorithmic trading, foreign exchange, energy derivatives, statistical arbitrage, and some more. Being in a top-caliber financial school, students are expected to experience internships inside big banking and financial investment firms during the summer.
Graduates of NYU found careers in different fields of the investments and banking arena like trading, asset management, or research and risk management. Most graduates were hired by big institutions like JPMorgan, BlackRock, or the Bank of America.
The Institute for Computational and Mathematical Engineering MS in Mathematical and Computational Finance of Stanford University is a relatively new program. Although Stanford has offered their financial mathematics program since 1999, this new platform is a leading-edge program designed to adapt to the evolving field of finance seamlessly.
It focuses on a more data-oriented and computational approach to mathematical finance with improved data and information technology, along with better strategies and models for investments, regulatory reforms, and risk management.
University of California at Berkeley
The Haas School of Business Master’s in Financial Engineering in Berkeley, California, has unique programs, thanks to its being one of the country’s top engineering programs offered within a business school. Their program is mostly focused on computational finance revolving around economic and business principles.
Once students complete three-quarters of the whole program, they sign up for an internship in top financial institutions. Did you know that 100% of Berkeley graduates were placed in key firms in the world’s top financial markets in London, New York, and Tokyo!
University of Chicago
The Master of Science in Financial Mathematics program is part of the university’s Financial Mathematics Department. It studies the relationship between applied and theoretical mathematics and its relevance to trading and business. The program includes risk management and mitigation and portfolio, regression analysis, stochastic calculus, and quantitative.
Students get the chance to simulate a real trading floor and get live access to Thomson Reuters Eikon or Bloomberg screens. The University of Chicago is a member of the university Trading Technologies, a program that grooms students for expert use of TT’s X-Trader program.
Graduates of the program have secured jobs inside JPMorgan, Goldman Sachs, UBS, and other leading financial firms, working as analysts, traders, quantitative researchers, or engineers.
University of Pennsylvania
A premier business school of this private Ivy League university in Philadelphia, The Wharton School of the University of Pennsylvania, offers a Management program with curricula that students can customize. It has 200 electives to choose from, and the Finance department has four key areas of specialization: corporate finance, financial and banking institutions, portfolio management and financial instruments, and international finance.
What Does an Investor or a Stock Trader Need to Know?
There are several positions associated with investing and stock trading, but the specifics vary. Regardless, you need to possess the key skills to excel in these professions.
While some skills required are often learned over time (like control or focus), others need more formal education; like a clear understanding of economics, technical analysis, financial markets, and research. However, there are lots of degrees that generally cover these fields. For instance, almost all degrees have a research component in their course line, but not all degrees will teach you the needed research skills designed for investing and stock trading.
To help you have a deeper idea of how specific degrees gear you for investing and stock trading careers, here is a more defined look at the responsibilities and roles of these jobs.
The primary role of a stock trader is buying and selling stocks. In most cases, we were made to believe in movies that stock traders spend a huge chunk of their time yelling out orders on the stock exchange floor. However, that is not the case. Of course, there are still traders who prefer doing this auction-style method, but the more modern ones spend most of their days in front of the computer, electronically buying and selling stocks.
Stock traders conduct analysis and research continuously so they can pinpoint possible price patterns of stocks. Meaning, that they always have to keep a close eye on the daily movements of the financial market and the economic trends. Using up-to-date information, stock traders make intelligent buying and selling decisions.
While investing and stock trading work hand in hand, investing is a broader term. It has two main categories: investment banking (the “selling” side), and asset management (the ‘buying’ side). Investment banking jobs are usually heavily quantitative, while asset management normally involves building relationships with clients to help them reach their goals.
Asset management investing positions include portfolio managers, research analysts, or financial advisors. Investment banking careers, on the other hand, include corporate finance, equity, fixed income research, derivatives, brokerage, emerging markets, and research analysts (the position exists both in investment banking and asset management).
Investing positions have so many options, and all these have a similar focus on analysis, research, and numbers. Investing careers, much like trading positions, require professionals to spend an awful lot of time in front of the computer, working with numbers.
Undergraduate Degrees for Investors
Generally speaking, the six college degrees suitable for investing and stock trading are:
- Business Administration
- Computer Science
- Physics, Engineering, Applied Mathematics
The most applicable course for anything related to finance is a degree in finance. What covers a bachelor’s degree in finance then?
Generally, the exact details of the course will vary from each business school. But their common goal is to teach students all about investing: portfolio management, stock trading, and capital budget. There are more specific courses that focus on investing, corporate finance, accounting, financial reporting, and fixed income securities.
Depending on the program, most colleges provide their students with the chance to take part in real-life portfolio management. This is a gateway for students to stand out as they start to apply for jobs. Another reason why finance degrees stand out is that admission to a finance program is relatively high. All its coursework is designed to prepare students for investing and trading careers in the future. Nevertheless, this also applies to other jobs related to finance, like accounting.
While having a degree in economics is somewhat similar to a degree in finance, the difference is that an economic degree is more focused than a finance degree. To earn a degree in economics, you must study many topics like economic indicators, currencies, business cycles, interest rates, and fiscal and monetary policies.
All of these are taught thru historic trends review, understanding the economic impacts brought about by past policy decisions and crashes. When students are provided with these data, this gives them a full understanding of the whole context of economics concerning policy decisions and current events.
Since a degree both in economics and finance is generally focused on trading and investing, a student’s choice between these degrees will largely be on personal preference. Finance degrees are better options for individual stock analysis, while an economics major is more practical for global macro investing.
Like a finance degree, a bachelor’s degree in business administration focuses on the foundation applicable to the majority of finance positions. However, a business administration degree offers better career flexibility than a finance degree.
How so? Business administration prepares students not only in trading and investing, but also for a career in auditing, accounting, financial advising, and even budget analysis. This degree is so broad that most of the programs under this course allow students to choose their specific concentration.
Common concentrations for degrees in business administration include management, accounting, marketing, and business communication. Those who intend to pursue a trading or investing career should focus on a concentration in line with these goals, like accounting.
Regardless of your chosen concentration, a business administration degree coursework includes business law, business statistics, or business communication. What sets this degree apart is that it concentrates more on critical thinking and communication than the other finance-based degrees.
When choosing a career in investing, computer science is probably the last degree to consider in mind. But in today’s world, careers in the finance field heavily rely on computers. Trading today is now more computerized; thus, clear knowledge and understanding of computers is a highly valuable skill. A degree in computer science also helps graduates to stand out among all their peers.
The coursework needed for this degree varies considerably from the coursework required for the other degrees on the list. But the programs in computer science mostly cover artificial intelligence, algorithms, data management, data logic, programming languages, operating systems, and statistics.
While every investor or trader can benefit from having a computer science background, most larger companies prefer to hire employees with experience in computer science for some key areas. One key area in a company is a risk management team. Here, computer scientists are very crucial. They also need these professionals to assist them in their algorithmic trading.
In a statistics program, students are taught how to gather, organize, and analyze data. These are then interpreted to come up with decisions. Programs in statistics sometimes overlap some coursework and information taught in finance, accounting, or economics
While the coursework for both statistics and computer science are far different from each other, they both have similarities. As mentioned above, those with computer science degrees normally work on a risk management team or the designing of trading algorithms.
This is also similar to statistics degrees work, although it offers more flexibility than computer science degrees. Needless to say, if you are more interested in the quantitative side of finance, like algorithm trading, statistics is a good choice.
Physics, Engineering, Applied Mathematics
While these three are different degrees, they share the same implication for trading and investing careers. The main difference, though, is that number of positions relative to the coursework’s applicability is usually lower than in some of the broader degree options. Nevertheless, these degrees are good options for students who wish to pursue the more technical side of investing and trading.
If you have a degree in physics, engineering, or applied mathematics, the derivatives market will likely come running to you. To excel in these careers, not only should you understand the many high quantitative concepts, but you should also have the capacity to apply these novel techniques in the most creative way possible.
10 Skills Every Master Trader and Investor Should Possess
Anybody can become an investor, but to become a master trader, it takes more than a clear understanding, of what investment capital is. Many seek to become part of the elite ranks of investors and traders, but only a handful of them successfully make it into the industry. Consistent and winning investors are just as rare as a multi-million dollar winning lottery ticket.
One proven way to become a successful trader is to be well-versed in technical analysis and financial markets and get a clear understanding of the fundamentals of economics. That said, there are also well-informed, well-educated, and smart professionals out there that don’t make the cut!
Each career calls for the necessary skills. Employers expect their investors and traders to be detail-oriented, aggressive, and good at handling pressure-filled work.
The main difference between winning and losing traders is dependent on the ten critical skills that traders and investors share. What are these skills?
Skills #1 and #2. Research and Analysis
One’s capacity to do quality research and strong market analysis is very important for a successful trading experience. Master traders hone their skills through informative research relevant to the securities they trade. A good investor should also accurately define the impact of these researches on a specific market.
To become a skillful investor, you need to utilize market information- both the market information and fundamental economic information, in the form of price action and trading. This will help you easily approach the market effectively.
Analytical skills, on the other hand, are just as important because these skills allow the trader to fully understand, identify, and utilize trends of the market. When you analyze a market, you get to spot trends and patterns easily. This also helps you identify the necessary trading approaches to incorporate with your trading.
Skill #3. Adaptability to the Changing Market Conditions
As you go along, you will learn various trading techniques and strategies that you can utilize repeatedly. Because of experience, you get to gather and develop your toolkit of maneuvers, methods, strategies, and tactics. Keep in mind that having your own investing and trading approach is a good move to remain on top of the game.
But you can even improve your trading edge by constantly monitoring the market for indications and signs that the market is forming new patterns or altering its conditions. From these changes, you can easily adapt by simply adjusting your strategy accordingly.
Skill #4. Understanding and staying in the Trading and Investing Game
No matter what industry you’re in, the profession you’re practicing, or the company you’re working with, everybody will face problems along the way. If you’re a full-time investor and trader, the possibility of gaining significant losses is just as high as meeting considerable gains. When you come across losses, remember to stay in the trading game. This skill is very vital, and something every master trader should have.
It’s all fun and exciting every time the trading movements are favorable in your bank account. Human nature dictates us to go on trading, especially if we know that the outcomes are good. However, the trading market is fluid. There will be days when the market will turn against you. At times like these, it can also be tempting to close out your trading platform and just wish the world will swallow you whole.
But a master investor should understand that neither extremes last for good. It’s a skill to wade through both the good and bad in the market, as this will help you learn, profit, and grow even more. One important part of staying in the game is to practice good money management and risk management. Practice a stop-loss order approach and avoid risking too much on any trade. Avoid taking trades unless you know these trades have positive risk/reward ratios.
Skills #5 and #6. Discipline and Patience
These interrelated skills are things every trader and investor should possess- in abundance. Staying on top of the game is very crucial because this allows you to experience both the lows and the highs of the market. This will teach you to make the needed adjustments to your trading practices. Therefore, you need to be disciplined and patient to be able to stick with your investing.
For example, a disciplined and patient investor knows that considerably better ones follow the usual worst trading sessions. Give and take or up and down fluctuations play fundamental roles in the market. At times, sessions will run flat and can stretch for days.
A disciplined investor will understand that in this industry, patience has its rewards! Thus, what do you do when the market is not in your favor? You simply wait. The market will eventually make a significant move, which is the right time to enter and risk your hard-earned money.
The most usual mistake most losing traders make is when they trade even if the market is not presenting genuine profit opportunities. There are even investors that trade out of sheer boredom. These actions are careless, impractical, and will always cost you a lot of money.
The idea here is to take trading in stride, especially if you notice a low-risk profit opportunity. Understand that if you’re getting underwhelming results today, you can always get new trading opportunities the next. Don’t allow markets that are going nowhere to sway you into deserting your good trading strategy and discipline.
Be patient. By the time an opportunity presents itself, don’t hold back. Enter the market with confidence in your investing capacity.
Skill #7. Record-keeping
Another important skill is record-keeping. Expert investors learn so much from their trading mistakes! Conversely, losing traders rarely learn something. One crucial habit that makes winning traders is to create a trading journal.
This journal is there to keep a written record of all your trading as it happens: your reasons for buying and selling, your entry point, where you secure your stop-loss order, your take-profit order, and even the amount of your wins and losses. Having a trading journal and going over these notes once in a good while, allows you to easily identify what you are doing right and wrong.
Skill #8. Learner Mindset
Finance is a very fast-paced environment, so it is always beneficial to keep the learner’s mindset. The desire to continue learning, coupled with sheer curiosity, can help you stay updated, and thus remain competitive.
Skill #9. Healthy Skepticism
In investing and trading, it is normal to get easily caught up in the latest craze. But be successful in the long run, learn to remain skeptical. Be level-headed as much as you can, and refrain from engaging in those short-term investing fads.
Skill #10. Persistence
You need to do your homework if you want to become adept in high-quality investing. Be persistent and hardworking, and avoid being too complacent.
As mentioned, the best college degrees perfect for investing and stock trading are:
- Business administration
- Computer science
- Physics, Engineering, and Applied Mathematics
These degrees and schools have a lot to offer. The best degrees, however, will depend on your desired career and level of specification. A college degree, a certification, or an internship is usually needed to stand out in the industry. With the right certifications and degrees from the best colleges to be an investor, you can easily excel in this field.