It is the job of the investment analyst to ensure that all the facts are in place when investment decisions are made. The job is demanding, requiring long hours and frequent travel, but the pay and benefits are good. The majority of current analysts report high job satisfaction. It is also a sector with high growth expected in the coming years, making it an attractive career path for young, motivated people.
An investment analyst is a financial professional specializing in evaluating financial and investment information, particularly for the purpose of making buy, sell and hold recommendations for securities.
Buy-side analysts work for fund managers at mutual fund brokers and financial advisory firms and identify investment opportunities for their firm.
Sell-side equity analysts often work for major investment banks and issue buy, sell and hold recommendations as well as company-related research.
Investment analyst salaries before bonuses average less than $80,000 per year, with successful analysts earning more than six figures.
Payscale.com “Average Late Career Investment Analyst Salary.”
Investment analysts gather information, research, and analyze assets, such as stocks, bonds, currencies, and commodities. Investment analysts often focus on niche areas to become experts in their chosen fields, such as a particular industry, geographic region, or a specific asset class.
The research is then presented to portfolio or investment managers, often as part of a team in which experts from different disciplines pit their insights against each other before final recommendations and investment decisions are made. Weigh the Collaboration is an important part of work, as is giving presentations and sharing information among colleagues.
An investment analyst continuously collects and interprets data, such as company financial statements, price developments, currency adjustments, and yield fluctuations. Information gathering also includes macro developments, such as a country’s political sea changes, the effects of climate change and natural disasters, and emerging industries and services sectors.
There is usually some level of direct interaction that occurs when the investment analyst meets with the management of the companies they are researching or similar key players. They can also meet stock brokers, fund managers, and stock market traders. Many investment analysts travel frequently, and may spend a few years in a foreign location to build local knowledge and build a professional network.
According to Payscale.com in May 2021, the current average salary for investment analysts is just over $66,000. Bonus and profit sharing structures are common, with bonuses maxing out at $21,000 and profit sharing up to $13,000. Commissions of up to $4,000 a year are also reported.
The U.S. Bureau of Labor Statistics (BLS) reported a median salary of $83,660 in May 2020, which may be explained by the high number of entry-level respondents to Payscale.com’s survey.
Salary varies dramatically with experience. While entry-level salaries are typically under $60,000,
10 to 20 years of experience brings salaries closer to $100,000.
According to Payscale.com, more than 20 years of experience can lead to a salary of $140,000.
Average base salary for an investment analyst in the US in 2021, according to Glassdoor.com
Geographical location is another important difference. New York City, San Francisco, Boston, and Denver all report salaries more than 20% above average, while Washington, Philadelphia, and Seattle show significantly lower salaries.
A bachelor’s degree in finance or business is the most common minimum requirement. Degrees in accounting, statistics, and economics may also be accepted by potential employers. MBAs and advanced degrees in mathematics or finance are common, especially among analysts who move into management positions.
Many employers also require a few years of practical experience, such as lower-level analyst positions and economic modeling in related industries.
The primary certification for an investment analyst in the United States is the Chartered Financial Analyst (CFA). This certification is equivalent in stature to the Certified Public Accountant (CPA) designation for an accountant.
Known for its three brutal exams with pass rates in the 40-50% range for the first two exams, the CFA is highly regarded in many areas of the financial industry and opens doors to a wide variety of career advancement opportunities. can
Another widely recognized certification is the Certified Investment Management Analyst (CIMA). CIMA is awarded by the Investments and Wealth Institute (IWI) and requires three years of documented industry experience, two separate background checks, successful completion of several hundred study hours, and two exams.
There are several impressive certifications for investment analysts that fall under the diploma mill category. Claiming such certifications on a resume (which usually requires no real work other than filling out a check) is likely to question an applicant’s judgment rather than landing a job offer. Get help.
An analytical mind with a keen sense of mathematical patterns and correlations is the most important tool for an investment analyst. The ability to spot trends early, and use specific skills to find ways to capitalize on them, is what makes an investment analyst valuable to a company.
Strong attention to detail and the ability to make sound decisions under time pressure are also important skills. An investment analyst must be able to respond quickly with new recommendations to sudden changes in the market.
Computer familiarity and the ability to create advanced predictive models is a definite advantage, as most of the work is done on computers.
Since this job is as much about communication as it is about crunching numbers, good people skills and presentation skills are important. A good portion of the work week is spent putting together professional-looking presentations with graphs and charts to illustrate the data and make reliable recommendations.
The most common career path is to a senior investment analyst position (median salary just under $85,000 in 2021) or a portfolio manager position (median salary around $87,000, but with substantial bonuses and profit sharing). .
The next step is either senior portfolio manager (median salary is about $124,000 plus bonus and profit sharing) or chief investment officer (CIO) (about $170,000 plus bonus and profit sharing in 2021).
Other investment analysts become independent investment consultants, offering their expertise to financial firms on a freelance basis. This option is available only after many years of experience and development of a network of industry contacts.
Most investment analysts work for large companies, such as investment banks, insurance companies, institutional investors, private equity firms, stockbrokers, or large charities. Benefits, including health, dental, and retirement plans, are universal in this sector.
According to the BLS, the job outlook for investment analysts is solid, with a projected growth rate of 5% through 2029.
Working hours can be brutal, with 12-hour days and mandatory weekend work, although the extent of this is influenced by local culture. Yet, as noted above, most investment analysts report high levels of job satisfaction.
There is some gender imbalance, with men outnumbering women at the entry level. This tendency is somewhat higher in the corporate organizational structure.
The reasons for the imbalance are not so clear. One possible explanation is that men perform better than women on standardized math tests, and this is likely linked to cultural norms.
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