Hi, I am currently thinking about what group I would like to join within IB. I'm heavily interested in healthcare, but I also love trading biotech stocks. Is it a dumb move for me to avoid a HC group so that I can continue to trade biotech stocks? I've been doing very well for what it's worth (although probably just got lucky)
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Based on the most helpful WSO content, navigating personal trading while working in Investment Banking (IB), especially within a specific sector like healthcare (HC), can indeed present some challenges. Here are a few points to consider:
Pre-clearance Procedures: In most IB firms, employees are required to get pre-clearance for their trades to ensure there's no conflict of interest or insider trading. This process can be stringent and might limit your ability to trade biotech stocks freely if you're working in a healthcare group due to closer scrutiny.
Blacklist and Restricted Lists: Firms often have a list of companies that are off-limits for trading by their employees, especially if the firm is involved in confidential deals with those companies. If you're in a healthcare group, it's likely that a significant number of biotech stocks might be on this list, restricting your trading activities in that sector.
Firm Sentiment on Personal Trading: While personal trading policies vary by firm, the sentiment towards active trading by employees can be cautious. Firms prioritize compliance and the avoidance of conflicts of interest or the appearance of insider trading. Being in a sector-focused group like healthcare could increase scrutiny on your trading activities in related stocks.
Consider Your Long-term Career Goals: If your passion lies in healthcare investment banking, it might be worth considering the potential trade-offs. The experience and network you build within the HC group could significantly benefit your career in the long run, potentially outweighing the benefits of personal trading in the short term.
Alternative Investment Strategies: Some IB professionals choose to invest in diversified ETFs or mutual funds to avoid direct conflicts with their work. This could be a way to remain invested in the market, including biotech, without the same level of scrutiny as individual stock trading.
In summary, while it's not necessarily a "dumb move" to avoid a healthcare group for the sake of continuing to trade biotech stocks, it's important to weigh the potential restrictions and career implications carefully. Consider your long-term career aspirations in IB against your interest in personal trading to make an informed decision.
Sources: Personal Account Trading Restrictions at MBB, Personal Trading Restrictions, https://www.wallstreetoasis.com/forum/investment-banking/new-h1-b-visa-restrictions?customgpt=1
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