Wednesday, March 28, 2012

Investment Analyst or Security Analyst - A Job Description

INVESTMENT ANALYSTS work in the field of investment securities.  Sometimes

they are called Securities Analysts or Financial Analysts.  Their services

are required by investment brokers, banks, pension funds, investment banking

firms, investment management and counseling firms, and insurance companies. 

The analyst's job is to make assessments of the economic performance of

individual firms or whole industries and to make investment recommendations.


Investment Analysts must stay current in the fields of industrial technology,

business, finance, and economic theory.  They assess complex technical data

and present written and oral reports.  Acting in the capacity of economist,

financial detective, and forecaster, analysts help direct much of the

professionally managed capital of this country.


In the research department of a brokerage house, bank, or insurance company,

Investment Analysts produce reports on general economic trends, individual

corporations, and entire industries to advise the firm's representatives and

clients in investment decisions.  They present comparisons of the various

securities of a given industry and develop opinions regarding their relative

quality.  Also, the current market price of a security is evaluated in terms

of its value as an investment.  Some of the factors involved are historical

and subject to statistical measurement; other factors require the exercise of

judgment in weighing intangibles, including the changing psychology of the

investing public.


In making a detailed study of a company, analysts determine the economic

position of the entire industry, how it is affected by new products, new

processes, and competition.  They summarize the financial position of the

company, analyze past experience, review dividend records, note capital

structure and comment on managerial effectiveness.  Often the analysts strive

to uncover hidden meanings in balance sheets and other financial reports. 

Finally, they develop a recommendation on the investment status of the equity.


Investment Analysts in an underwriting house must prepare a complete

financial picture on companies before their firm undertakes the financing of

them.  After the underwriting house is convinced of a company's soundness,

the analysts recommend the types of equities that will best suit the

company's needs and will also be attractive to the investing public.  They

then determine the price at which the security should be syndicated and

offered to the public.
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