Investing in the different markets like equities, bonds, and other investment instruments has always been a challenge for investors. Whether you are wanting to handle your investment portfolio to support a growing family to ensure their future well-being, control the investments for your employer in the role as the Chief Financial Officer, or to get involved with investment policy on the board of a non-profit, a better understanding often leads to improved results.
Private Wealth Managers Benefit from Clarity
Private wealth managers in either larger wealth management firms like UBS or in boutique family offices taking care of the established family interests to create generational wealth all require improved information tools to succeed. With a lack of clarity, money is often lost either through an error of omission (something not stated) or an oversight with available information that either wasn’t examined or correctly understood.
When it comes to information, we often have enough of it, but it’s wrongly interpreted. Just look at the polling in the US election a year ago and you’ll quickly be reminded how so many pundits armed with polling data got the predictions completely wrong. A few pollsters got it right – and often do so consistently every election – yet they were largely dismissed as wrong or completely ignored at the time by mainstream media outlets.
Expertise is Required to Generate a Positive Alpha
Getting a positive alpha – a return in excess of the market return – is something that few fund managers ever achieve consistently. Hedge fund managers have more success, but they have a wider mandate when it comes both to what investments they can put money into and the leverage they can apply to multiply small returns into larger ones by adding risk through borrowed investment capital.
Studying for an online master of science in finance at Northeastern University is certainly one way to learn how to become a fund manager or a private wealth manager. This degree, which has two branches, including one that goes into an MBA for applicability to the corporate environment, is studied via the Northeastern University Online program. Students complete the course using online lectures and downloadable coursework without needing to attend campus. Learning how to generate positive alpha has never been so easy; you can keep your day job and fast-track students can complete the degree in under two years.
Judging Risk Correctly is a Highly Valued Skill
One of the things that’s needed with corporate finance, and in the investment world too, is correctly judging risk. For instance, while traditional teaching suggests that investment beta is the measurement of risk, it’s actually not. Beta is the measurement of price volatility compared to the market; for instance, how much Berkshire Hathaway’s original stock moves compared to the S&P 500 index. However, Warren Buffett of Berkshire Hathaway, the multi-billionaire over in Omaha, might suggest that beta is only relevant when you need to sell. Understanding the difference between the actual risk of loss and price volatility of a holding protects investors from making bad investment decisions when the price of a good stock is bouncing around too much for their liking.
Using advanced learning techniques, software to facilitate it, and good old-fashioned common sense, you can get better results from investing. Clearheaded thinking about the markets also helps, whether dealing with a personal portfolio or one managed on behalf of a growing business.
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