CFA + Political Science/International Relations

Hi, I am a full time student and done with bachelors in Finance and now will be apearing for CFA level 1 this december. I have deep interest in politics and i just want to know will it be a plus if i do Masters in Global Affairs or International Studies along with CFA to make a career in financials analysis, I have an idea that there is a relation between politics and finance but i just want to know if it will be professionally practical to have this kind of education. thanx.

No, that political science degree will not help you at all.

The places where political science and IR can help you exist, but they tend to be far less numerous than the number of positions where a run-of-the mill finance degree would help. Don’t expect most people (particularly people on this board) to know where they are.

Part of the problem is that everyone thinks that they can understand politics, but most people are not trained to think systematically about politics, looking it at from different angles, whether it be the interaction of interest groups, game theory, leadership, the role of ideas, how political organizations work, two-level bargaining, etc… People mistake having “an explanation” for political phenomena with having “the explanation” for political phenomena. Most trained political scientists tend to have a preferred framework (institutions, class-conflict, political culture, etc.) but they know how to apply different frameworks, and more importantly, they know that they should be applying different frameworks when analyzing politics. Ordinary people tend to have one particular framework that maybe works a lot of the time, but can’t really analyze anything beyond that. It’s a bit like people who figure that all you need to know for investing is the P/E ratio.

Macro strategy, currency, interest rate trading, and emerging markets are where these kinds of issues will help you. And the CFA will help assure people that you know something about finance in addition to the stuff you know about politics and strategic interactions. If you did comparative politics and know a fair amount about the comparative method as a methodology, a lot of the analytical techniques can also translate to company analysis, but people who haven’t done rigorous work in the comparative method won’t know that.

The Fed hires from schools like SIPA, the JFK School, the Wilson School, and SAIS too, and from the Fed you can go a fair number of places.

The economic world is driven ever more by political decisions now, by political leaders and central banks. The fact that interest rates don’t have much lower to go means that decisions about public debt, private debt, and monetary policy are driving the economy with much more volatility than the last 20 years or so, because you can no longer just cut interest rates to soothe over political and economic bruises. But you have to make that case… don’t expect others to be able to think of it for themselves. We’re moving from an environment of distributive politics to redistributive politics, and that is a much less laissez faire friendly environment, so political analysis will be important. Even to the extent that some actors pursue more laissez-faire policies, there are looming crises of governability, and as much as libertarians hate government, markets cannot function without a government that can at least enforce contracts and the law.

Also, take an accounting course, or one of those wall street prep course. Those arguments aren’t going to help you get a job if you aren’t able to at least read and hopefully produce a model for a company (note, “model” in finance generally means something very different from “model” in the social sciences). The CFA exams also cover some of this, but it’s not as applied. And build up your quant skills as much as possible. You won’t be pricing derivatives, but you should know how to do some decent econometrics.

Undergraduate poltical science is also very different from graduate political science, so it’s not likely to help as much. Undergraduate political science tends to be more oriented toward discussing political issues and political history and understanding the basic mechanics of politics. Graduate political science has a lot more of the epsitemology of social science - in a noisy world, how do you know that what you suspect is true or not. Are your opinions falsifiable, and what evidence would you need to do that. It’s very different from undergraduate “let’s talk about the abortion debate” work. Graduate level work is potentially more helpful because it tends to go into more depth about how to analyze data, both in quantitative and qualitative ways. I actually think that political science does a good job of training people to do the qualitative analysis. People who aren’t trained in this tend to think of qualitative analysis as just a bunch of anecdotes, but good qualitative analysis has a specific method of how you choose your anecdotes and knowing what kinds of knowledge you can and can’t extract from a specific collection.

my god bchad writes a lot! yes

I just needed to push back hard against a summary dismissal.

I guess my previous comment was a bit simplistic, but I figured that a one sentence response that applies to 95% of cases would be an economical use of text.

Applying quant rationality to a human subject, ohai? :wink:

i remember stumbling on some graduate political science course content on the net and saw a fair bit of econometrics there , particularly probit models…i may be wrong though meh

its like he has a phd in poli sci or something

I’m going to save reading this post for my lunch break.