Readings and references in investment strategy and policy, for institutions and individuals who desire to take practical advantage of what is taught in the mainstream of financial economics. Based on this analysis, the analysts then make reports with certain recommendations such as: buy, sell, strong buy, strong sell or hold. These recommendations carry a great deal of weight in the investment industry including analysts working within buy-side firms. Even within these specialties, there are subspecialties such as analysts who specialize in equities and those that specialize in analyzing fixed-income instruments. Many analysts also specialize even further within a specific sector or industry. Analysts tend to read publications such as The Wall Street Journal, The Financial Times and The Economist as well as financial websites.
Analysts in investment banking firms, however, differ from analysts in buy- and sell-side firms as they often play a role in determining whether or not certain deals are feasible based on the fundamentals of the companies involved in a deal. Analysts also interpret financial transactions and must verify documents for their compliance with government regulations. Firms with larger research departments assign analysts even narrower subject areas.
Financial analysts need to remain vigilant about gathering information on the macroeconomy as well as information about specific companies and the fundamental microeconomics of their balance sheets In order to stay on top of financial news, analysts will need to do a lot of reading on their own time. Some analysts travel to companies to get a first-hand look at company operations on the ground level. Analysts also frequently attend conferences with colleagues who share the same specialty as they do.
As interoffice protocol goes, analysts interact with each other as colleagues while they tend to report to a portfolio manager or other senior in management. For senior analysts who continue to look for career advancement, there is the potential to become a portfolio manager, a partner in an investment bank or senior management in a retail bank or an insurance company.
Analysts that are promoted also learn to develop communication and people skills by crafting written and oral presentations that impress senior management. While a career as a financial analyst requires preparation and hard work, it also has the potential to deliver not just financial rewards but the genuine satisfaction that comes from being an integral part of the business landscape. An example is the Chartered Financial Analyst (CFA) certification from the CFA Institute , which financial analysts can get if they have a bachelor’s degree, 4 years of experience, and pass three exams.