Cutting edge subjects in Finance?

January 10, 2007 5:05 AM

What are some cutting edge subjects or trends in Finance?

I am halfway through a Masters degree in Finance. It should take me a year to complete. The core of the program thus far has been quantitative balancing of bond portfolios and Graham/Buffet theory on equity. I have the leeway to take classes in any other department/subject that I wish to complete the degree. I intend to focus on a particular topic, instead of just taking random courses, with the tentative plan to start a PhD within five years (probably not in business, more likely in Psychology or Philosophy, but I am certainly undecided right now). Here are my likely choices thus far:

--Philosophy tinged with economics to contemplate Business Ethics
--Take a few psych courses and learn some Behavioral Finance
--International business and focus on Micro-lending
--Political science to get a new perspective on Currency trading
--Statistics and calculus for Portfolio management
--More accounting courses and get my CPA alongside things to flesh out the SOx implications (I'm partway there already)

I am all over the place looking for a world-changing, or at least a my-life-changing, financial innovation. I find redeeming qualities and interesting facets in all of the above.
Expose me to things I didn't know and give me even more choices to pull my hair out over; or tell me why one is right or a few are just stupid.

posted by iurodivii to work & money (10 comments total)

Rather than add more possible courses of study, I'd ask you what you actually want in a career. Business or Academia?

If business, do you like small or big? Safe and stable businesses or more experimental and volatile ones? Are you the type who dreams of working 80 hours/week and making seven figures, or is your dream 50 hours/week, six figures, and evenings with the wife and kids?

Do you like travel? extended travel? How about travel outside the first world?

Finance is a big world, but my suggestion is to aim for the career that makes you happiest, rather than the course of study that is the most fascinating.
posted by Tacos Are Pretty Great at 8:24 AM on January 10, 2007

Related: Have you ever found yourself dreading working for a particular firm? Are you the type who would be embarrassed to work for Lehman, and get a spring in your step from a job at Goldman?
posted by Tacos Are Pretty Great at 8:27 AM on January 10, 2007

I am more inclined towards Academia. I also prefer to help the little businesses, lower-income individuals and community-based programs than work on Wall Street.
posted by iurodivii at 10:00 AM on January 10, 2007

I think reading this article and poking around the forums on that website might be helpful.
posted by pegstar at 11:05 AM on January 10, 2007

arr. this one
posted by pegstar at 11:08 AM on January 10, 2007

Well, you certainly are all over the place with these ideas. You might have to take some time off, just to get a little space to seee what tickles you fancy.

Myself? Well, if I could do my Masters over (my work was in Market Microstructure), I'd definitely be looking at behavioural finance. We just don't know why bubbles develop at all, or persist to the levels that they do. There is a lot of basic research to to be done - not to mention money to be made - helping us to understand why otherwise reasonably intelligent folks behave like lemmings sometimes.
posted by Mutant at 11:21 AM on January 10, 2007

A lawyer's perspective: structured finance has magic ingredient x about it at the moment. There's interesting work being done halfway between ethical philosophy and finance about the morality or otherwise of close-out set off.

Otherwise I think that microfinance is the most interesting and morally worthwhile field in pure 'finance' presently.

Interested in social capital and international political economy or is that too close to social science? (Or indeed too 1997 / Giddens / Third Way?)
posted by dmt at 11:39 AM on January 10, 2007

I'd agree that this decision depends mostly on you, but if you are interested in behavioral finance (or behavioral economics), I'd suggest exploring that area. That area, as well as neuroeconomics, seems to be one of the hot topics in academia and if you are thinking about a PhD it will probably be a good choice. Taking some classes will give you a chance to see if you like it.
posted by btkuhn at 8:04 PM on January 10, 2007

Re: behavioral finance, one of my brothers was recommending a book called Beyond Greed and Fear: Behavioral Finance and the Psychology of Investing. Another book he recommends is about people's perception of risk.

Re: international finance, the work of Professor Ananya Roy, about the impacts of World Bank policies on the global poor, is supposedly pretty hot.

My brothers also recommend these books: 1, 2.
posted by salvia at 9:42 PM on January 10, 2007

Great info everyone. Thanks. I know that I have to make this decision on my own, I just didn't want to overlook any other interesting areas that I did not know about.
posted by iurodivii at 1:12 PM on January 11, 2007