Careers Efficient Markets Conundrum

Efficient Markets Conundrum

  • This topic has 2 replies, 2 voices, and was last updated Nov-18 by Jeff.
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  • Jeff

    Hey everyone. This is my first post but ive been perusing through the site for a while now. I was hoping to get some peoples takes on this.

    Im a Level 2 candidate, just took the exam this June, and as far back as I remember I loved picking stocks and doing “Hedge fund work”. The more I studied though the more i began to believe that markets are efficient to the point where and I now feel stupid even looking for a job in the hedge fund industry. The problem is im not sure if theres anything else i really wanna do! Has anyone else had this internal “moral” dilemma? if not, are there any positions that have similar enjoyments without feeling like Im cheating people out of their returns and money they pay in fees?

    -Jeff o:) o:)


    Heavy. I used to be in wealth management, and when it comes to clients’ personal approaches to managing their investments, there is about a 60-40 split (in my firm) when it comes to active vs passive investing. Nonetheless, even for firm passive investment believers, there is still a lot of value in creating funds and investment approaches to suit clients personal circumstances.

    A HF manager claiming to beat the market by actively picking stocks allows investors to try and increase their return while increasing their risk profile. So no, I don’t think what you’re considering is ‘pointless’. Just maybe not as rockstar as you thought it was? :smiley:


    Well first of all thanks for the response, as you can tell im pretty much lost when it comes to the industry seeing as i have no experience. So you say a HF manager tries to increase risk profile? I thought the idea was to beat the market on a risk neutral basis (eg: Beta=1) no?

     I definitely understand when you say that a manager should invest to his clients needs, and that definitely is worthwhile and useful to society, but thats no hedge fund…

    and definitely makes sense that its not as rock-star as i thought, would you be able to tell me what the wealth management industry is like? 


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