Good at investing - how to turn this into a job?

Question

I'm 34 years old. Twelve years ago, I got a bachelor's degree in Computer Science, and have been working as a computer programmer more-or-less continuously since then.

I also have been investing in the stock market since 1999. I'm very meticulous, and have carefully tracked my investments. Recently, I decide to sit down and really analyze my performance vs. the market.

I threw out the 1999-2002 data because it was mostly filled with my stock options at the company I worked for, and was thus not indicative of my own trading prowess. But since 2002, I've just been a retail investor, investing a self-directed IRA and various brokerage accounts.

From 2002 through today, I've made about $24,000 in net contributions into my various accounts, and today the value of the accounts adds up to about $40,000. I would have had the exact same performance had I been investing in a savings account yielding about 9% - a pretty good return for the past 8 years.

I also did a more detailed comparison, and did a what-if scenario where I just put all of my contributions into (and took my withdrawals from) imaginary stocks that exactly tracked the Dow, Nasdaq, and S&P 500. In those scenarios, I would have ended up with between $19,000 and $21,000, depending on which index I used.

So, I'm pretty good at picking stocks and managing investments; as of today, I have about twice as much money in my various accounts as I would have had I just blindly followed the "index fund" advice, and I have a substantial profit instead of a small but significant loss.

I've been programming for 12 years, and the market for programmers isn't getting any better. Most programming these days is very boring "make the button on the web site a little bit bluer" web development stuff. My current job is a contract position that will end about four months from now.

So, I'm a pretty good investor, will be looking for a job soon, and might be interested in a career change.

I live in Boise, Idaho, not exactly a financial hotbed. I have no desire to move elsewhere.

Is there any way that I can turn my trading prowess into a job as a professional portfolio manager? How would I even begin doing something like that?

Answer 1

You need to do a few things to analyze your results. First, look at the timing of the deposits, and try to confirm the return you state. If it's still as high as you think, can you attribute it to one lucky stock purchase? I have an account that's up 863% from 1998 till 2013. Am I a genius? Hardly. That account, one of many, happened to have stocks that really outperformed, Apple among them. If you are that good, a career change may be in order. Few are that good. Joe

Answer 2

Staying in Idaho, you could pursue some additional degree and try to get a job with a bank in the area as an investment advisor of some sort. However, I have doubts as to whether or not you'd be able to employ your creativity and test your own instincts in that sort of a position.

If you really want to get into the big-money investment sector, I'd suggest a move to a financial hub (Chicago, New York, San Francisco) and getting a job programming for a big firm. After obtaining some experience there, you may be able to transfer to a more investment-oriented position (at the same firm or another) and from there to a position where you can unleash your talent (assuming you have some). Putting a degree in finance somewhere in the mix would help too.

Consider the following. You want to make $50,000/yr (low) by running a fund with a 1% expense ratio (high) investing other peoples' money... you're dealing with at least $5 million. That's a good chunk of change. To be entrusted with that kind of money is kind of a big deal, and you'll need to get some people to believe in your capabilities. You're not likely to get that kind of trust working out of Boise. Even if you're just doing research for some fund manager, you're not likely to find too many of those in Boise either.

Answer 3

Step 1: Get a part-time job in sales. Perhaps selling appliances at Sears.

Step 2: If you are great at that, then look into becoming a stock broker/investment adviser in Boise ... which is a sales job.

Step 3: If you are great at that, then you might be able to become a portfolio manager, perhaps a hedge fund manager for the clients you collected as a stock broker/ investment consultant.

That seems to be the steps I have seen from reading the bios of a number of professional investors.

The other method seems to be an MBA from a top 10 business school.

Answer 4

Don't. There is no such thing as being "good at investing" without personal expertise in the domain. All such attempt WILL fail, whether you're Warren Buffet or not. Will you divest before the big drop? There will be no way for you to tell or analyze that if you have no expertise in the field.

The reason is essentially "there is no free lunch". What you see in the stock market is a mostly a phenomenon of population growth -- having nothing to do at all with quality of product or expertise of leadership.

If you find yourself getting proficient at this field, it probably means you should find a job as a finance manager. The skills you are learning with tracking investments are perfect for being a business manager. It could be retail (like managing a Verizon store, for example). It could be food... whatever.

Farm cows also see "continuous growth" and then.... Seriously, don't do it.