- In my most recent semester at Iowa, I completed classes including Investment Management, Corporate Finance, and Corporate & Financial Risk Management
- Mostly full of lectures on theories that, for the most part, aren’t actually applied (CAPM, EMH) and heavily weighted on multiple exams
- I sat for Level I of the CFA Program in early June after five months and 400+ hours of studying
- Exam oriented (obviously) with a broad “foot deep and a mile wide” sense of learning about everything from ethics to dividend discount models
- I’ve read articles and books on finance and investing in my own personal time
- Often brings a more historical approach often citing previous examples in economic history at my own speed
- I’ve learned about credit research analysis and the debt markets since starting my internship in January
- Fast-paced environment approach to how analysis and bond trading is really done in the real world
Each way of learning has its own pros and cons, but the various curriculums and methods have brought me a larger knowledge base nonetheless.
I recently read a blog post called “Rethinking The Finance Curriculum” by Tim Johnson and have found it to really hit the nail on the head. At the end of his great post that looks at typical business class requirements and the curriculum of the CFA Program, he comes to an interesting conclusion as to what should actually be emphasized:
In summary, my syllabus structure would be
1. The nature of money (macroeconomics and more)
2. The purpose of finance (history and ethics)
3. The practice of finance (behavioural, risk and asset management
4. Tools and techniques (optimisation, statistics)
While I do agree with most of his thoughts, here are three items that I think should be added to and/or most emphasized in the typical business curriculum regarding finance:
- Personal Finance & Financial Literacy – It’s a shame that this isn’t a required class or group of classes taught at every high school and again at a more in-depth level at colleges. No matter what career path you decide to venture into, you’ll need to at least understand the basic concepts of personal finance and financial literacy. Hell, even before you decide to venture into a career, you need to have a good grip as you’ll most likely be making a choice that will cost you tens of thousands of dollars: what college to attend. From understanding the banking system, loans, mortgages, savings and investing methods, products, and tools is increasingly important in today’s ever-changing financial world. Financial literacy is a huge key to success and it’s frighteningly shocking how few people can even calculate a monthly car payment anymore.
- An Emphasis On Economic History – Interning and listening to conversations between analysts (especially sovereign), portfolio managers, and traders has made me realize that I haven’t learned much about the history of finance or the financial system while at school. Frequently, I will read about or hear past economic events brought up, from the 1997 Asian financial crisis to the OPEC oil price shock, and I find myself not knowing nearly enough to participate in a discussion on the subjects. I’ve also found it increasingly important to learn how everything in the financial markets move when other parts and pieces move up and down. Hearing discussions about what will happen to Country X’s economic demand and currency strength if Event Y happens in Country Z is a very important side of finance that I have yet to learn much about in my classes.
- A Comprehensive Look At Major Industries, Sectors – While at my internship, creating models and analyzing companies in various industries and sectors has opened my eyes up to how little we actually learn about them in our current classes. Understanding how companies in the technology sector operate and how analysts valuate them versus other sectors would be great base information to know coming out of college. I would be willing to bet that most graduating finance students couldn’t name half of the sectors that make up the S&P 500.
I’m interested to hear the thoughts of others in the finance community.