What does an Investment Analyst do?

An investment analyst has three areas of responsibility: determine the value of the current investment, create advice reports, and research new investments. They typically have a university degree in finance, accounting, or related field, and can find employment opportunities in investment firms, large banks, and pension funds. The role of investment analyst is expected to have a lower than average growth in the next five to ten years, as the number of investment opportunities decreases.

People who enjoy working with numbers, are interested in finance, and have an analytical thought process find this type of work rewarding. The primary function of an investment analyst is to analyze market activity and advise the firm which action will produce the best yield and minimize the risk of loss. The investment market trades in a wide range of financial instruments, including a mix of short- and long-term bonds.

The primary role of the investment analyst is to determine the value of a wide range of investment instruments available for purchase, terms and conditions, ability to meet internal requirements, and compliance with the overall focus of the firm. Companies that trade in investment instruments are almost always financial and investment firms. Although the rate of return on these instruments can be quite high, few companies become involved in this as a side line to their primary business function, as the risk is also very high.

Advice reports provide background on the investment, historical performance, ranking in the marketplace, comparable investment tools, and any relevant news that may impact long- and short-term performance. The report also includes a section for recommendations. Here the investment analyst indicates if the firm should buy, sell, hold, or pass on a particular financial instrument. The decision must be supported by the information in the details section, which includes the current offer, options, and risk assessment.

Research forms a significant part of the job of an investment analyst. They need to build a network of business contacts, subscribe to business journals, and review the reports and recommendations issued by other analysts around the world. Reviewing and staying up to date on all this information is time consuming, but an essential role.

Talk with people who work in the investment industry, and they should be able to advise you about the work environment in an investment firm. Typically, the hours are long, the pressure intense, and the clients demanding. Many people who are attracted to the level of activity in an investment firm experience burnout after five or ten years. The level of intensity is quite high, and often causes staff to experience physical symptoms of prolonged exposure to stress.