What does it mean to be a Financial Analyst?
The job title itself is actually self explanatory. In basic terms, Financial Analyst collect and analyze financial information, and then make recommendations to companies, customers or clients based on the research they’ve done. They focus on a particular sector based on the company they work for. Some of them include; investment banks, corporate, pension funds, mutual funds, securities firms, insurance companies, and other businesses. They are also called securities analysts and investment analysts. Where analysts would research stocks, write reports and monitor financial movements to essentially determine whether or not a specific deal is realistic based on the fundamentals of the companies involved.
At the job, financial analysts would need to be constantly updated on both international-economic issues and information about particular companies’ balance-sheets. This would involve keeping up to date with financial news, along with managing statistical data. There’s also a strong focus on recommending individual on investments and collections of investments, which are known as portfolios and preparing written reports.
Financial analysts can be divided into two categories:
Buy-side analysts develop investment strategies for companies that have a large number of money to invest. These companies, called institutional investors, include mutual funds, hedge funds, insurance companies, independent money managers, and nonprofit organizations with large endowments, such as some universities.
Sell-side analysts advise financial services sales agents who sell stocks, bonds, and other investments.
Financial analysts generally focus on trends affecting a specific industry, geographical region, or type of product. For example, an analyst may focus on a subject division such as the engineering industry or the foreign exchange market. They must understand how new regulations, policies, and political and economic trends may affect investments.
Investing is becoming more global, and some financial analysts specialize in a particular country or region. Companies want their financial analysts to understand the language, culture, business environment, and political conditions in the country or region that they cover.
The following are examples of the types of financial analysts:
Portfolio managers play a key role in deciding the best investment plan for an individual or company according to the income and ability to undertake risks.
Fund managers work exclusively with hedge funds or mutual funds. This extensive experience often includes activities in different aspects of fund management as a fledgling fund manager learns about accounting, balancing portfolios, responding to market shifts, and financial ethics. Both fund and portfolio managers frequently make split-second buy or sell decisions in reaction to quickly changing market conditions.
Investment analysts determine the value of the current investment, create advice reports, and research new investments.
Ratings analysts analyze companies or industries and make investment recommendations based on their findings. These recommendations include buy, hold and sell recommendations on financial instruments that include equity or debt investments such as stocks or bonds.
Risk analysts evaluate the risk in investment decisions and determine how to manage changeability and limit potential losses. This job is carried out by making investment decisions such as selecting contradictory stocks or having a combination of stocks, bonds, and mutual funds in a portfolio.
Planning to become a Financial Analyst?
Financial analysts typically start by specializing in a specific investment field. As they gain experience, they can become portfolio managers, who manage a team of analysts and select the sort of investments for the company’s portfolio. They can also become fund managers, who manage large investment portfolios for individual investors. A master’s degree in finance or business administration can improve an analyst’s chances of advancing to one of these positions. Important qualities to have are; analytical skills, communication skills, computer skills, decision making skills, detail oriented and math skills.
To be successful, financial analysts must be motivated to seek out blurred information that may be important to the investment. Many work independently and must have self-assurance in the decisions they make.
The financial services industry is competitive and it can be tough to break into the analyst field. If you're interested in the next step in your career as a financial analyst or any other finance jobs, we can help you.