Would one allow more job opportunities than the other in the future? If I’m weak in accounting, but always enjoyed and had strength working with large data sets, programming, and other technical skills, does that show that a quantitative research side might be a better fit for me?
Here’s an example of what a quantitative research analyst would do (copy and paste from a random job post):
Perform quantitative/statistical financial and economic research to develop new stock selection models or improve current models.
Independently research and analyze quantitative research topics relevant to stock selection and portfolio management.
Work closely with fundamental portfolio managers and analysts to help them use insights from quantitative stock selection models.
Conduct research and analysis on other investment management research topics, such as attribution and portfolio construction.
Keep abreast of industry and academic research and identify new research ideas.
There are many more fundamental analyst jobs than quant jobs. Part of the reason is that quant investing scales better (provided the strategy does not run into liquidity constraints). A quant strategy can analyze 100 stocks on a computer in under a minute, but a good fundamental analysis can’t.
Things have been tough for quantitative analysts in recent years, with an oversupply of candidates for a limited number of positions. They also got a bad rap around the time of the financial crisis because most quant models did not adjust their risk properly when the credit crunch came, or they all did it in lockstep.
Fundamental analysis will typically incorporate future looking information better than quant analysis, which is better at extracting lessons from the past. Sometimes the past is more informative than people’s opinions about the future; sometimes not. It’s not that there’s no future in quantitative investing, but there is likely to be more positions available in fundamental investing for the foreseeable future, and the competition for quant jobs is likely to be more intense because you need fewer (but highly qualified) people to run a quant strategy.
Right, that’s why I called it the credit crunch, rather than the financial crisis, although in my own mind, the credit crunch is basically the opening round of the financial crisis, anyway.
There are still a lot of quant jobs around. Unfortunately, they are more related to Risk Management nowadays. So, if you want a stable pay check at the expense of large upside, then it’s still an ok option.