This is the first weekend after Britain voted in a referendum to exit from the European Union. Especially, this weekend, one type of knowledge worker is going to be in very high demand and kept very busy.
That’s investment industry jargon for Quantitative Analyst. And that is someone who is an expert in finance mathematics, computer programming and other supplemental skills and knowledge. That person uses those tools to develop, package, and risk assess a wide spectrum of investment products sold through investment brokerages, hedge funds, and banks.
A common practice of investment companies is to combine multiple products into hybrid offerings which, in turn, maximise return on investment. This practice has been going on for quite some time by investment companies, hedge funds, and other financially involved companies, even corporations which try to make their cash accounts work harder. The market for high-risk investment instruments hit the nitrous-oxide switch when the Glass-Steagall Banking Act was repealed in 1999 and banks were able to participate in all manner of hybrid, and high-risk financial instruments–as recklessly as they have been doing. Companies involved in financial investments are now maximally exposed to high-risk investments at a time, recently, when it was assumed that Britain was going to be an ongoing member of the European Union, (EU).
But those scenarios changed, today, when Britain announced that its people voted to exit from the EU. As a result, investors moved massive amounts of money out of stocks, for example, and into “safe-haven” vehicles such as precious metals and the US Dollar.
That vote to leave the EU hit financial companies much like a monkey wrench tossed into a fan. The markets got body-slammed today. That was not enough to purge the risk from the global financial system. TRILLIONS of dollars remain tied up in high-risk financial vehicles that still need to be re-assessed and adjusted in light of the BREXIT vote.
Experts, if there really is such a thing, are surmising that today, (Friday), was a warm-up for a much larger purging yet to come, likely on Monday and Tuesday of next week, that is, on June 27 and 28, 2016. My guess, though, is that the market adjustments will last a lot longer, possibly to the end of the week or even t the end of the second week.
To prepare for the fast action that we MIGHT see on Monday and Tuesday, and thereafter, financial companies will want to re-assess all of their financial instruments, strategies and their associated risks. QUANTS do that kind of work. Scenarios and strategies must be readied for the opening bell of the markets after this weekend. QUANTS will be putting in very long hours this weekend, and, doing so under great pressure to produce recommendations for Monday morning.
If ever there is a time when Quants were in demand, and compensation likely would have no limits, it’s THIS weekend.
NOTE: before making any investments or executing any financial actions, be sure to consult with your CERTIFIED FINANCIAL PLANNER or other experienced financial advisers. Investing is NOT a do-it-yourself activity for the inexperienced or the untrained.