A postgraduate degree in financial investments and trading offers students the opportunity to expand their practical knowledge and foster critical thinking. It equips students with the knowledge required to make financial recommendations for organisations, based on a global perspective. A masters in trading also provides students with investment management skills and the ability to evaluate the trade-off between risk and return. Read this blog to learn more about what you can do with a postgraduate degree in this field.
What is trading?
Trading is the process of buying and selling stocks, commodities, foreign exchange currencies and other securities. It enables institutions and individuals to earn profits from a variety of different trading strategies, such as:
- Position trading;
- Swing trading;
- Day trading;
- Scalp trading;
- High-frequency trading.
Traders aim to generate consistent profits by implementing different trading rules within their day-to-day business:
- Maintain discipline and psychological control;
- Follow pre-defined trading processes at all times;
- Keep long-term and short-term profitability in mind;
- Update trading plan regularly as markets evolve;
- Be aware of upcoming political and macroeconomic news;
- Keep an eye out for technical indicators to avoid significant losses;
- Understand personal risk tolerance;
- Avoid distractions and focus attention on price action.
Types of investments and financial instruments:
- Stocks – Owning a company’s shares means the buyer is a part-owner of that company, and they will receive dividends from the company on a regular basis. The value of a share price depends on the financial performance of the company, as well as the overall economic and political situation at the time. Stocks can be classified into two types:
- Common stocks – These represent part ownership in a company, and common shareholders have the right to vote, based on the corporate policy.
- Preferred stocks – Preferred stockholders possess a higher claim on asset distributions such as dividends, but they have limited voting rights, as defined by the company’s corporate governance.
- Bonds – A bond, also called a fixed income investment, is a type of investment in which the buyer effectively lends money to the bond issuer in exchange for regular interest payments. The loan will be repaid at a specific date, called the maturity date. Bonds can be issued by government organisations (national, state or municipal) as well as corporations.
- Investment funds – These funds gather money from different investors, which is then invested in accordance with their specific investment strategy. There are various different types of investment funds:
- Mutual funds;
- Closed-end funds;
- Exchange-traded funds.
- Pension Funds – Investments for future events such as retirement require the implementation of a longer-term savings plan. Retirement plans enable individuals to build up a fund over their lifetime in employment to enable them to earn an income in retirement.
- Insurance – Insurance coverage provides individuals or organisations with financial support after unexpected events. Insurance premiums are paid to the insurance company, which then has the obligation to pay out in the case of a valid claim.
- Cash (or its equivalent) – Cash equivalents are investment securities that allow individuals to access their money, which helps secure their original investment. Although this form of investment typically delivers a stable rate of return, it is not suitable for long-term investment, since long-term returns are historically lower. Cash equivalent investments can be of three types:
- Savings account;
- Money market accounts;
- Certificate of deposits (CDs).
Which are the biggest stock markets?
- New York Stock Exchange – The New York Stock Exchange (NYSE) is the largest equity market in the world, with a market capitalisation of $23.12 trillion (March 2018), nearly 40% of the total world stock market value. There are over 2,400 companies listed on the NYSE, which span sectors such as finance, healthcare, consumer goods and energy.
- Nasdaq – This is the second largest stock exchange in the world, with a market capitalisation of $10.93 trillion (March 2018). Nasdaq stands for National Association of Securities Dealers Automated Quotations and it specialises in technology stocks such as Apple, Google, Microsoft and Facebook.
- Tokyo Stock Exchange – Also called the Japan Exchange Group (JPX), this is the third largest stock exchange in the world ($6.22 trillion market cap). Founded in 1878, its benchmark index is the Nikkei 225.
- Shanghai Stock Exchange – Shanghai Stock Exchange (SSE) is a non-profit organisation run by the China Securities Regulatory Commission (CSRC). The SSE allows investors to trade in stocks, funds, bonds and derivatives, with the benchmark stock index being the Shanghai Composite.
What can a Postgraduate Certificate in Finance and Trading do for you?
- It provides you with the acumen to succeed in the field of financial investments and trading;
- It helps you acquire the skills to grow at a professional and personal level;
- It gives you a deeper knowledge of financial management and analytics;
- It allows you to apply financial concepts and make recommendations in a business environment;
- It provides you with the guidance to apply appropriate principles of valuation for financial assets and securities;
- It helps you solve problems and make smart financial decisions;
- It gives you the option to join professional groups with like-minded people, and to develop your professional network;
- It can open doors to a variety of career paths and enables you to succeed in a competitive market.
The London Academy of Trading (LAT) offers a Postgraduate Certificate in Financial Investments and Trading with a practical real-life focus. If you are interested in acquiring skills for organisational strategic decision-making, apply for this course now!