Friday, April 4, 2014

Learning Investments

By Charlie Clarke

As student studying abroad asks me how to learn the course I'm teaching next fall "Investments" independently.  Someone told him it was "near impossible."  I know that's not true, because I did it!  Here's my advice:  

I don't agree that Investments is a difficult subject to learn independently.  You must remember that wall street is filled with Mathematicians, Statisticians, Physicists and Engineers that have no formal Finance training.  That said, it requires some hard work, and more than that, a passion for the material, which makes it not feel like work at all.  Additionally, it's never been easier in the history of the world to learn something on your own as there is a tremendous amount of material available from top institutions.  

The textbook we use is Bodie, Kane and Marcus.  Here is an MIT course syllabus with lecture notes.

Coursera offers free online classes with videos, practice problems as well as certificates of completion if you end up taking it for credit.  I would probably start there.  None of the courses really replicate 3302, as they are probably more quantitative, but if you want to do investments as a career, that is not a bad thing.

Bob Shiller's Financial Markets course at Yale is online and has a lot of overlap with the Investments course.  This course is not that quantitative and pretty interested.

Here are some more quantitative courses.  I don't know your level of commitment and math background, but there is a lot of info about professional investing in these courses:

Computational Investing, Part I 
Financial Engineering and Risk Management (this is the most mathematical/advanced)

For outside reading, I'd start with "Random Walk Down Wall Street" by Burton Malkiel.  That's the book that got me interested in Investments.  Check out what's available and follow your interests.  You don't have to follow any particular order.  You can learn a lot.

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