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Would a finance or economics major be more beneficial for wanting to get into the stock market?
What degree should I follow if I want to become a day trader in the future that is working for a corporation.
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5 answers
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Stephanie’s Answer
You can take a free, short class (less than one hour) about Finance to see if you like it. The class is on HP LIFE- https://www.life-global.org/course/21-basics-of-finance
Updated
Elizabeth’s Answer
Hi Ethan! Choosing Finance could be a great choice if you're thinking about a career in the stock market. But if you're more interested in ECON, that's a solid path too! Think about what kind of job you want after school. With a Finance degree, you could also explore opportunities in accounting or financial reporting for companies and nonprofits. So, even if you change your mind about the NYSE, you'll have lots of options! 😊
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Kevin’s Answer
Hi Ethan,
Great question! If you're interested in working with the stock market, the first consideration is whether you're more interested in trading or investing. Trading is focused on short-term transactions (very short hold periods) while investing is focused longer-term (longer hold periods). The two require quite different skillsets.
If your goal is to work at a corporation in trading, those funds nowadays are often synonymous with 'algorithmic investing' which make automated trades based on market indicators and movements. These roles often come from computer science / software backgrounds as they have to design the algorithm. I had a roommate who once received a hardware engineering job offer from one of these firms (as if your physical equipment allowed you to execute a trade 0.25 seconds faster than the next competitor, it could make a difference for the bottom line).
Alternatively, anyone can be a day trader on the side. As someone who has worked in investment banking and private equity, my personal take is that individual day trading is a tough market to make consistent income with given its risk profile and the capital required. I also think that there are more transferable skills to other corporate roles from learning investing over trading. I don't want to dissuade you from pursuing individual day trading though as I'll readily acknowledge that there are lots of folks who make lots of money doing this (although I think that is the outlier rather than the norm).
Anyways, if I was studying to be an effective trader both economics and finance are valuable -- to an extent. My caveat is because many traders (including and especially the algorithmic trading corporations) work on pattern recognition. Understanding the concepts from macroeconomics and corporate finance are important, but mostly to the extent that they help inform pattern recognition.
Another potential career role is in Sales & Trading at an investment bank. Generally, this involves working with high net worth clients around potential trade ideas and helping them to execute on these trades at the best possible prices. Overall, this industry is also moving towards being more automated (i.e., software engineering).
On studying finance and applying it to the stock market for investing -- I think this is incredibly valuable because studying finance will teach you the fundamentals of valuation. If you're working at a corporation, this might look like a hedge fund, where you're a stock-picker that takes long (price will go up) and short (price will go down) positions. This work is very analysis heavy and makes you consider a business' competitive positioning. I think this long-term investing skill is very valuable to other domains, whether it be in other corporate roles or in your personal life managing your own portfolio and building your wealth through retirement.
I realize this answer may open up more questions than just the one you asked so please feel free to ask any follow-ups.
Cheers and best wishes to the journey ahead!
Great question! If you're interested in working with the stock market, the first consideration is whether you're more interested in trading or investing. Trading is focused on short-term transactions (very short hold periods) while investing is focused longer-term (longer hold periods). The two require quite different skillsets.
If your goal is to work at a corporation in trading, those funds nowadays are often synonymous with 'algorithmic investing' which make automated trades based on market indicators and movements. These roles often come from computer science / software backgrounds as they have to design the algorithm. I had a roommate who once received a hardware engineering job offer from one of these firms (as if your physical equipment allowed you to execute a trade 0.25 seconds faster than the next competitor, it could make a difference for the bottom line).
Alternatively, anyone can be a day trader on the side. As someone who has worked in investment banking and private equity, my personal take is that individual day trading is a tough market to make consistent income with given its risk profile and the capital required. I also think that there are more transferable skills to other corporate roles from learning investing over trading. I don't want to dissuade you from pursuing individual day trading though as I'll readily acknowledge that there are lots of folks who make lots of money doing this (although I think that is the outlier rather than the norm).
Anyways, if I was studying to be an effective trader both economics and finance are valuable -- to an extent. My caveat is because many traders (including and especially the algorithmic trading corporations) work on pattern recognition. Understanding the concepts from macroeconomics and corporate finance are important, but mostly to the extent that they help inform pattern recognition.
Another potential career role is in Sales & Trading at an investment bank. Generally, this involves working with high net worth clients around potential trade ideas and helping them to execute on these trades at the best possible prices. Overall, this industry is also moving towards being more automated (i.e., software engineering).
On studying finance and applying it to the stock market for investing -- I think this is incredibly valuable because studying finance will teach you the fundamentals of valuation. If you're working at a corporation, this might look like a hedge fund, where you're a stock-picker that takes long (price will go up) and short (price will go down) positions. This work is very analysis heavy and makes you consider a business' competitive positioning. I think this long-term investing skill is very valuable to other domains, whether it be in other corporate roles or in your personal life managing your own portfolio and building your wealth through retirement.
I realize this answer may open up more questions than just the one you asked so please feel free to ask any follow-ups.
Cheers and best wishes to the journey ahead!
Updated
Jackie’s Answer
Hi Ethan! Great advice from others! I just wanted to add that you could choose one as a major, and the other as a minor. Finance and Economics complement each other well! This would still provide you a strong foundation in the one you don't choose!
Updated
Christopher’s Answer
Ethan -
If you love working with numbers, analyzing financial markets, and making quick, strategic decisions, finance might be the best choice. A career in finance is ideal if you're interested in money management, investment strategies, and using practical skills to achieve financial goals. An economics degree might be more appropriate if you are engaged in economic research, policy analysis, or public service. Ultimately, the decision is yours.
If you love working with numbers, analyzing financial markets, and making quick, strategic decisions, finance might be the best choice. A career in finance is ideal if you're interested in money management, investment strategies, and using practical skills to achieve financial goals. An economics degree might be more appropriate if you are engaged in economic research, policy analysis, or public service. Ultimately, the decision is yours.