A securities analysts job involves a lot of reading, research, meeting
people, writing etc. The analyst has to study company history, and about
its products
and services. He or she may do so by referring books and trade publications,
financial reports, by studying the public records of the company, or by
participating in public conference calls or using reference services like
Standard and Poor's Outlook etc. Based on this preliminary research, the analyst
may shortlist companies in a particular industry he or she is dealing with and
then proceed to study the same thoroughly. Analysts usually study an entire
industry, observing and assessing the current trends in business practices and
industry competition. They must keep abreast of new regulations and policies
that may affect the industry as well as monitor the changes taking place in the
economy, as such happenings affect the earnings of the companies.
Once the analyst has short listed companies which promise to be good investment
opportunities, the next step is meeting the top management of the concerned
companies and gathering detailed information about them. After having collected
detailed information about companies the analyst has to prepare a report on
the company.
Analysts may use spreadsheet and statistical software packages to analyze
financial data, spot trends and develop forecasts, write reports and make
presentations. A major and important part of an analyst's job is writing reports.
The report should be lucid, concise and persuasive. The report consists of a
description of the business and the company's investment potential and it may
also project future earnings. The analyst may summarize the report with ratings
such as "buy", "sell", "over perform",
"hold" etc. Once the report is ready the analyst has to use his/ her
marketing skills to sell his/ her services to traders, brokers and investors by
making recommendations about investing opportunities and convincing them to buy
or sell the concerned stocks and securities.
Success in this field depends on performance or reputation. If an analyst's judgment
is consistently correct which means they are profitable, his/her
performance record as well as reputation gets a boost. The more outstanding
performance record an analyst has, the more successful he/or she can be and
success in this field translates to good pay packets and compensation too.
An analysts work is very time consuming in that analysts are required to put
in long work hours. They need to travel a lot- visiting companies, attending
conferences, conventions and tradeshows. Their work requires constant attention
and is quite demanding and absorbing. They need to take quick decisions as the
stock market may fluctuate and thus need to keep cool in situations where
the markets may turn bearish.
Analysts can work their way up to become senior financial analysts or
associates after 3 or 4 years of work at some firm. They can progress to become
investment bankers, investment advisors or financial consultants. Some may even
become portfolio analysts and further become portfolio managers. Portfolio
managers however require licensing from SEBI.