I'm just curious how easy it is to move from trading into financial analysis or portfolio management (in fixed income)? If someone spends the first few years of their career in the FI trading department, can they generally move to FI analysis/research or portfolio management? If so, do they generally need to go back to school for an MBA, MSF, or anything else in order to make the switch?
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I have done just this, but I started my career in trading with a master's from a top university in finance and economics.
I came to the realization that it's actually A LOT easier to move from trading to strategy (better than research, because you publish your trade recs), and then to portfolio management. Your alternative is to move from trading to junior portfolio management to PM.
I actually like the former path, because Jr. PMs don't really make trading decisions at all, and don't run any risk. If you want to be a big PM at a major fund, at some point, you need to establish a track record for yourself. As a former sell-side trader, I realized that whilst I knew I had made money, and my co-workers could attest to that fact, I wasn't compared to a benchmark, and didn't have a verifiable track record. Unless you want to work as a prop trader for someone like Moore or Brevan Howard, you're going to need a track record.
I just think the exit opps from doing a few years in strategy AFTER spending a few years as a trader are quite good. People will respect your knowledge of the markets and give you additional credit for being able to do (and understand) your own research.
If you can make the move now, great. If not, go back to get that top quality master's degree, and then make the move. Good luck!
Sorry if this is a stupid question, but what do you mean by strategy? You're not talking about strategy consulting are you? You're talking about some sort of investment strategy positions, right?
On both market-making and prop desks, you will have 'desk strategists.' They are the guys who watch for market events, tell the traders what those events mean, make trade recommendations, and publish some research/trade ideas. They also attend client meetings/dinners/drinks as experts in their respective fields, and are amongst the people you see on Bloomberg or CNBC talking to the media.
Generally, you need a master's or Ph.D. to get into such a position. In fact, I don't know anyone who does it that doesn't have at least a master's degree.
Still, if you already have trading experience, I think it's one of the best ways to become a PM at a major institution/HF. For a couple of years, you have to step back from actually facing the markets, but you're still on a trading desk, and your making trade recs. Better yet, you're publishing those recs, and (depending on the bank you're at) probably running your own portfolio. Some banks only let you run a shadow portfolio, but some allow you to put on real trades, in which case, you're more like a proprietary trader with some research responsibilities.
(BTW, if you were to become a straight prop trader, you'd be doing some of your own research in any case just to keep aprised of the markets and generate some alpha. Reading other people's research is a beta generator, since you're just copying a market idea.)
Also, since you get to actually meet clients, so long as you're not a total goober, you'll get your name around the market pretty fast. And since you're publishing research and (eventually) talking with the media, you start to build up your own franchise. Since all business is--when it comes down to it--a 'people business,' the fact that you will have met traders/PMs/corporate treasurers means you'll be in a great position to move to the buy side when the time comes.
A lot of strats do this, but you generally can't start as a strat. You need some market experience and some additional education. I mean, if you had never been a trader, no one is going to think very highly of your trade recs. And if you've never faced the markets, how can you tell other traders what various events ought to do to the markets?
In any case, you're on the right track.
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