It isn't easy to predict how the stock market will change from one day to the next or guess which small startups will turn into massive, successful ventures.
However, investment industry experts say the ability to envision the future is a vital skill to cultivate if you hope to work in this field.
They urge MBA hopefuls who want to break into the investment industry to look for business schools that will teach them how to make prudent decisions about where to invest money. Coursework on investment strategy can help prepare MBA students for a variety of lucrative jobs, including careers in investment banking, hedge funds, venture capital, asset management and private equity.
Here are six traits to seek in a business school if your goal is to work in the investment industry.
1. Cutting-edge training: William Goetzmann, a professor of finance and management studies at the Yale school of management, says it is crucial for these MBA students to gain familiarity with new technologies for making investments.
"Fundamental stock selection is something that's being replaced by more quantitative investment methods – even high-tech, big data methods," says Goetzmann, who is also director of Yale's International Center for Finance.
"So for a career that's positioned for the future," he says, "I think students have to think about whether they are going to a place that offers them the opportunity to learn about new methodologies – new investment techniques – as well as traditional techniques."
For instance, he says, a neural network – which is a sophisticated type of artificial intelligence – can help investment managers make smart predictions about stock prices.
2. Innovative faculty: Goetzmann advises those with an interest in investment management to look at publications for practitioners in the field, investigate which academics have made significant contributions to those publications and identify the schools where those academics teach. He says academics who regularly write for practitioner publications are probably doing influential and groundbreaking research.
"There are opportunities to actually study with people who have changed the way that the world invests,” Goetzmann says.
3. Investment-related extracurricular activities: Some MBA students say they've gained marketable experience by joining an investing club, and they encourage prospective students to target b-schools that offer these student groups.
Typically, a business school investment club will host lectures with investment industry leaders and will assist members with career exploration by exposing them to niche specialities, such as nonprofit endowment management.
Victor Zhu, a second-year MBA student at Yale and co-president of its Investment Management Club, says the club regularly sends teams to stock pitch competitions, which are excellent opportunities to attract hiring managers' attention.
"This club is crucial in terms of guiding students through the recruitment process,” Zhu says.
Peter Wilson, a second-year MBA student at the University of Virginia's Darden school of business and CEO of the Darden Capital Management student club, says the club offers an information session for prospective students to let them know what resources Darden offers to future investment managers.
4. A student-managed investment portfolio: "Students with interest in post-degree asset management positions should determine if schools have a portfolio they can co-manage – preferably a real money one tied to a class, but a virtual fund managed by a student organization can substitute," says Helen Dashney, director of the Financial Markets Institute at Michigan State University’s Eli Broad College of Business.
Experts say that running an investment fund during business school gives students hands-on experience making investment decisions, which is something employers value.
5. An active alumni network: Another aspect to consider when researching prospective institutions is alumni engagement and recruitment.
When a b-school has multiple alumni from the investment industry who regularly visit campus and serve as event speakers, that is a strong, positive sign about alumni engagement. It may also indicate that these alumni are recruiting current students, says Andrew Kern, assistant teaching professor of finance at the University of Missouri'sRobert J. Trulaske, Sr. College of Business.
6. Relevant courses: Prospective MBAs should also look for b-schools that offer courses in behavioural finance, risk management and data science, experts suggest. Behavioral finance focuses on how human emotions affect financial choices, which experts say is key to understanding panic-driven fluctuations in the stock market.
Risk management teaches students how to decide whether the potential reward of an investment outweighs the risk of that investment, while experts say that data science courses show students how to quickly analyze large amounts of information.
For those able to take these courses, Bolzan added, "These students will graduate not only with deep finance knowledge, but also an ability to leverage machine learning techniques and artificial intelligence to create complex technical solutions and investment strategies."