Questions

[XADAM AAB]

Hi lads,

Can anyone answer these questions? what is the first thing coming to your head guys?

1. If you have got $10,000, how would you invest it? and why? what about if it was $1,000,000?

2. When you consider a betting strategy (regardless of how complex or simple it is), what factor should you take into account?

3. If there was no financial limitations, what would you do with your time?

4. What opportunities do you think exist for future developments of
computational methods in finance?

thank you guys,
XADAM AAB

 

[Jose T]

1. I have an amount of money like this that I invest.

I am invested in a few equities in the US Tech sector (famous names), a handful of US equities in other sectors, in a couple mutual fund strategies (Energy, Bonds, Finance). The Bond mutual fund is a significant chunk. I am thinking about divesting all mutual funds and switching to ETFs though. I am also thinking of investing in gold.

2. The way you consider your betting strategy depends on your time horizon. Technically, I don't need this money for quite some time, but I think of the time horizon as five years as I could conceivable want to make some large purchase like a small house in the time frame. Generally, that allows me to sleep at night given that my holdings face a certain degree of year-to-year volatility. However, so far, I have not tried anything more speculative than holding equities and (indirectly) bonds (e.g. options or shorting stocks).

If I had $1MM, I would probably be more willing to accept volatility and I would probably try to think of some speculative strategies that I could try while holding a 'safety amount' in something stable.

3. If there were no financial limitations, I would do math because I like math. I doubt I would do financial math, however. Of course I would spend time with my wife and kid as well.

4. I suspect that most of what was called 'financial math' earlier in the last decade is over at this point. What remains are a handful of niche areas (e.g. HFT, portfolio optimization) and a lot of IT work which people flatter themselves by thinking it is quantitative. There will always be opportunities for Math people and programmers in Finance or any other industry but the opportunities will be more prosaic and no one will call you a 'rocket scientist'.

 

[MRoss]

You're questions are extremely broad and difficulty to answer. Generally for questions 1 and 2: Why are you investing the money? What is your financial and family situation? These are important questions to answer before you decide how much risk you want to take! A middle-aged man with just 800k to invest and wants it for retirement would be foolish investing it in risky portfolios. Perhaps he would even be wise to hire a property manager and buy a multi-family house to rent! These are not questions people who do not know you can answer.

3. I would teach math, most probably at a decent college. I love teaching. I would also open up a mentoring "lounge" for troubled teens who do not feel comfortable at home or just need somewhere other than home to "feel at home". I've done plenty of "at risk" work before and there is nothing like the feeling of giving/guiding someone towards a better life.

 

[mfegrad]

1. wouldn't change much. dividend payers (reits and stalwarts), mutual funds (high yield/muni/dividends), some options.

2. expected value, whether i like the idea of the bet itself, how the bet makes me feel. i occasionally buy lottery tickets, even if it's an idiot tax, as i know some of the money is supposed to be funding (admittedly awful) schools and it gives me a few hours to think about...

3. teach, as well. except i would prefer middle school math.

4. who knows?