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Posts published in “Finance”

Index Fund Millionaire

By Kyu Kim

In our Foundations of Finance class, we all learned about modern portfolio theory. In this brief article, I will summarize this famous theory we learned and how it’s implemented in the real world. I hope Sternies can understand this concept more practically, as it is essential for early retirement plans for young professionals.

According to modern portfolio theory, developed in the 1960s by Harry Markowitz, a Nobel Prize winning economist, risk-averse investors can create an optimal portfolio by holding both risk-free securities as well as risky assets. Given that higher risk is an inherent part of higher reward, this method maximizes expected return based on a given level of market risk.…

The Election, the Vaccine, and the Moolah

If you haven’t heard Joe Biden is president-elect of the United States of America, you should probably stop reading now. The market had priced in several predictions for the US elections of 2020. We all know the polls were not as accurate as projected but, as usual, the devil is in the details. The Senate and House election outcomes have caused the major moves in the market thus far, not so much the presidential election. And don’t worry, we will obviously get into the Covid vaccine’s effects on the market, too.

First and foremost, the Senate and House election surprises. What this means in market speak is the unwinding of the “blue wave” bet.…

The Election & The Market

This year has been peculiar to say the least. A pandemic that started more or less in January killed more than a million people and is now on the cusp of a second wave across the globe. In late spring, we experienced nationwide protests against police brutality and racism that ultimately spread around the globe. Then riots captured our attention. Now we come to fall where we have, as you may have heard, likely the most important American election in the past 50 years. It may decide who the next Supreme Court Justice is. It obviously can flip the executive branch, but even more importantly,it may also flip the senate, resulting in the “blue wave” many political strategists have predicted (more on this later).…

Fixed Income Capital Markets Technology: The Future of Primary New Issuance

Fintech firms are actively working to electronify and digitalize fixed-income primary markets

Global fixed-income primary markets continue to develop away from voice-driven communications and manual operational processes to more streamlined interoperable platforms. Firms that once struggled through paper document-driven offerings with no transparency, insights, compliance or regulatory audit trails are now embracing the electronification and digitization offered by firms such as IHS Markit.

Global markets have historically traded fixed income products with a specific set of information and data, allowing for technology firms to standardize and electronify the process; identifying, mapping and modeling the necessary data into digital workflows. Many sectors (investment grade, high yield, emerging markets, structured and securitized) carry unique structures, pricing mechanisms and optional provisions – most of which are specific to each asset class – however, often times this data does remain consistent within each sector and is capable of being identified and tagged for digital standardization.…

Coronavirus and the Market Part III

Note: Considering the potential market fluctuations throughout the COVID-19 Pandemic, it should be noted this article was originally written on 3 June 2020

A few weeks ago in May, the US treasury announced a record high $96 billion quarterly refunding driven by the Covid-19 emergency stimulus. This compares to $84B from last quarter, an amount which held for the previous 5 quarters. So how does a former Goldman Sachs Banker, who is one of the longest-tenured cabinet members in Trump’s administration, decide to structure such debt in such crazy times? In other words, how does Mnuchin, the U.S. treasury secretary, think?…

Coronavirus & the Market: Part II

Note: Considering the potential market fluctuations throughout the COVID-19 Pandemic, it should be noted this article was originally written on 4 April 2020.

These are unprecedented times. Shamefully, the biggest thing I first noticed was the lack of a long commute to work. It went from 80 minutes to 25 to 0, which was actually quite nice. Then I noticed how sad the cereal aisle looked. This is essentially the only place I’m allowed to go now. All kidding aside, I,  and probably most of us, fail to appreciate the full gravity of the pandemic at this point, and how it will affect the decades to come.…

Coronavirus & The Market

If you are lucky enough to have a 401(k), first of all,
congratulations. You are preparing for retirement when you’re young, likely
30-plus years before you say goodbye to your working days. That’s the best
possible way to prepare for your golden years, regardless of how fast your
portfolio grows. For folks in that group, the value of time (read: compound
interest) is worth more than a single annual return in the stock market. 

However, if you do have a 401(k), or any investment
portfolio with a heavy concentration in equities for that matter,
unfortunately, it has probably gotten crushed lately.…

Fireside Chat with Jelena McWilliam

By Richard Berner

On February 19, the Stern Center for Global Economy and Business and the Stern Volatility and Risk Institute hosted an NYU Stern Fireside chat with Jelena McWilliams, Chairman of the Federal Deposit Insurance Corporation, one of America’s critical financial regulators. 

Stern’s Fireside Chats give faculty and students an opportunity to interact and engage with leaders in business and government. This event did not disappoint: Chairman McWilliams is the third woman to fill the leading role at the FDIC and the interview revealed clearly why she is a role model for all of us. 

We began the discussion by exploring Chairman McWilliams’ background and her passion for her work as a financial regulator.…

Finding Your Voice: Career Advice from Karen Reynolds Sharkey (MBA ‘98)

By Alyssa Brewer

Karen Reynolds Sharkey (MBA ‘98), a leader in the finance world who launched and continues to lead the national business owner strategy at Bank of America’s Private Bank, is channeling her years of experience into supporting female entrepreneurs and business leaders.

Driven by a desire for a career on Wall Street, Karen Reynolds Sharkey joined J.P. Morgan after completing her undergraduate degree at Rutgers University. She completed the part-time MBA program at Stern while working on the trading floor in equity derivatives, then moved to San Francisco to head up a team covering the West Coast. As she moved into senior leadership positions, Sharkey’s career brought her back to New York, followed by a transition into the private banking sector with Bank of America.…

2020 NYU Stern Fintech Conference: No Borders, No Barriers

By Robert Bole

On March 27th, NYU Stern’s Fubon Center for Technology, Business, and Innovation will host Stern’s Fourth Annual Fintech Conference.

Financial Technology, or “Fintech,” refers to technology focused on improving/ automating components of the Global Financial Services industry.  This improvement is seen typically from utilizing specialized software and/or algorithms, powerful computers, and big data.

The focus of this year’s conference will focus on “Global Fintech 2020: No Borders, No Barriers” and includes a packed agenda with speakers; including Kunal Kapoor (CEO Morningstar, Inc), Charles Elkan (MD and Global Head of Machine Learning at Goldman Sachs), and Andrew Boyajian (Head of Banking, North America Transferwise).   …

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