Financial Engineering as a Career Option for Aspirants

1. Financial Engineering as a Career Option for Aspirants

2. What was your childhood dream? What did you aspire to become when you were a kid? A pilot, an astronaut, a policeman, a doctor or something completely different. Some probably even thought about becoming Batman when they grow up. However, did you ever imagine donning the hat of an investor or a hedge fund manager which in the present times is one of the most sought after profiles in the world today apart from being one of the highest paying ones. Some common questions that you are likely to be faced with in picking it as a career choice include, what does a hedge fund manager do? And what kind of educational background helps in becoming a professional investor?

4. Hedge fund managers manage your portfolio by strategically applying complex trading, risk management and portfolio development strategies to improve the profitability of your investment. Now let us see what can possibly help you in understanding how a hedge fund manager thinks and operates. The keyword is Financial Engineering, many successful investment bankers like Sarthak Malhotra, Tony Guida or James Velissaris have done their financial engineering from top colleges.

5. Financial engineering, the title itself is self-explanatory, applying a structured engineering methodology to asset management. In simple words, it focuses on transforming different financial theories into real-world applications by integrating information obtained from different fields like economics, mathematics, data science and financial theory. Many world-renown quantitative analysts, like Ray Dalio or James, develop their trading programs by transforming financial theory into a trading application with the help of financial engineering.

6. Despite being a relatively new field of study, financial engineering studies have rapidly grown and are acknowledged by many major universities across the United States. Financial engineering is used across various different profiles in the world of finance, such as corporate finance, risk management and analysis, behavioural finance, credit risk and management etc.Even though financial engineering has vigorously grown in recent years and is widely accepted in the world of finance, it also has met its share of backlash and criticism from scholars within the field and outside, such as in the fields of mathematics and statistics. This was seen during the 2008 global financial crisis, where many banks used a popular mathematical model which led to a major downfall.

7. Even with all the possible pitfalls of new technologies, failure to acknowledge their competitive advantage can be a myopic and major qualitative loss in the field of finance. A progressive quantitative analyst needs to be cognizant of all advanced tools available in the field of finance. Financial engineering has shown outstanding results in situations where organisations or departments have reached a point of impasse, in most cases these are not small financial problems that can be resolved with traditional methods of cost-cutting or strategic restructuring.

8. Even if financial engineering has shown promising results, it doesn’t state that you can start your own hedge fund management company right out of college. People invest their money with those who have a great track record and may have shown credibility in the past. Reaching the levels of experts like James Velissaris takes a great deal of expertise and experience in the field even after earning a financial engineering degree.SOURCE CREDIT: https://jamesvelissaris.blogspot.com/2021/09/financial-engineering-as-career-option.html

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