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Financial Analyst

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Field of interest: Financial Analysis


I am interested in investing and that means that I am interested in almost all "investment vehicles"; from stocks and bonds to futures and options. However, I am in certain stage of my life where I don't have high income. So I shifted my interest primarily toward options. Because of the simply reason, options in 100 shares will cost much less than actually buying 100 shares. This reason and my today's situation have "forced" me to be more interested in options. But of course options are highly complex and highly leveraged and they require more than just a basic knowledge of the stock market. I have read a lot of books on this topics, trading, value investing, technical and fundamental analysis, and I realised that I will need to have all these things in a "small pocket" if I want to success in this field. That's why I started a little bit earlier. But I would not speak about independent trader, because it would not be realistic for this assignment. So if I expect to work in a firm where I would implement this interest that I mention above, than it would be position of financial analyst. In the further text I would focus myself on the financial analysis and firms that need financial analyst (also called security and investment analyst), like banks, insurance companies, mutual and pension funds, securities firms. However I tried to be realistic, so I didn't look to much into future. I focused my self on today and possible internships in this field.

It is difficult to say how promising it is, because the demand for financial analysts rises and falls with the ever-changing stock market. However when large businesses consolidate some financial analyst positions may be eliminated. By the last expectations of the U.S. government economists, jobs for financial analysts will grow as fast as the average for all careers through 2014. More financial analysts will be needed to help businesses choose between the growing number of investment options. However I think that it is clear that with existence of markets and companies, there will always be a need for financial analyst; the people who will analyse company and present their investment potential. For example, an analyst with an investment bank might evaluate the relative attractiveness of a stock for the firm's brokers to recommend to clients. It is obvious that trend would maintain at this level, or go even higher. With development of the emerging markets, demand for capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services, will rise, and with this the demand for the financial analysts will also rise. Firm and clients always need someone to tell them what is prospective of the certain company. Someone who will rate the companies with "buy", "sell", "market perform", "overweight" or "hold" sign. As the economy expands, both the growth of established companies and the creation of new businesses will spur demand for financial analysts. However, mergers, acquisitions or corporate downsizing are likely to restrict the employment growth to some extent. It is also obvious that financial analyst will benefit from an increase in investing by individuals.

Industry observation

So for financial analyst the financial service industry should be the main and only goal. What is financial service industry? A financial service is the largest industry in the world. The industry represents 20% of the market capitalization of the S&P 500. Financial service industry describes also organisations that deal with the management of money, like banks, investment banks, insurance companies, credit card companies and stock brokerages.

I would be focused more on investment services, especially asset management or investment management. Investment management refers to professional management of different securities, like shares, bonds etc. and other assets, like real estate. Their main goal is to meet specified investment goals for the benefit of the investor. Assets management is the term usually given to describe companies which run collective investment funds. Top 5 largest asset management firms are: Barclays Global Investors, State Street Global Advisors, Fidelity Investments, Capital Group Companies, The Vanguard Group.

The top asset management firm is Barclay Global Investors. It is a division of British-based Barclays Bank which specialises in asset management. They are the largest money manager in the world, with over $ 1.77 trillion under management.

What are the main problems in this industry?

* The revenue is closely connected with market valuations. So if there is a major fall in asset prices revenues decline rapidly



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