Become an Equity Analyst

An equity analyst researches trends in an industry, geographic location or type of product. Investors use the information to predict the future of stock prices. The equity analyst may work for an investment firm focusing on one particular area of the market to make predictions regarding investments. A career as an equity analyst requires a formal education, skill and experience spotting trends and interpreting data. Analysts must have skills in mathematics, statistics and research to work in the position. While no specific certification or licensing is required, you may wish to obtain specialized certification to advance your career.

Steps

Getting an Education

1. Earn good grades in high school. If you know as early as your high school years that you want to enter the field of financial analysis, you should work hard to earn good grades. You will likely need a college degree, so doing well in school will help you gain access to the college or university of your choice. Template:Linebreak:You should begin to focus on math and business courses, as these will be most directly related to your future work. A strong background in reading, writing and analysis will also be helpful.
2. Earn a degree from a reputable college or university. To get a job as an equity analyst, you will need a college degree. You can get started with a four-year bachelor’s degree, although a master’s degree will make you a stronger job candidate. You should focus your studies on economics, finance or business.
   • The guidance counselor at your high school should be able to help you research colleges and universities that have strong financial programs. If you are already out of high school, you may try calling the guidance office of the high school in your area to see if they could help you anyway. You might also check with the reference librarian at your public library or at an area college library.
   • Your degree program should include courses in statistics, finance, accounting and taxes to prepare for a career as an analyst.
   • Equity analysts must be familiar with business regulations and government policies to determine how it will affect the market and business.
3. Complete a Master's Degree program. A graduate degree increases the employment opportunities that will be available to you. You will want to look for advanced studies in economics, business or finance.
   • You should pursue advanced courses such as bond valuation and risk management to pursue a career as an equity analyst.
   • A Master's Degree in finance includes courses that prepare you to work in the finance industry. Relevant courses may include international finance, financial strategy, corporate finance theory and equity valuation.
4. Take advanced professional courses to advance your career. Even after you are working as an equity analyst, you may want to continue taking courses. This is a good way to show your employer that you are serious about your career and you want to advance in the company. Template:Linebreak:Professional training courses are offered, both online and in classroom settings, that cover the basics of equity report writing. These can include such topics as assessing industry attractiveness, financial modeling, equity valuation techniques, and equity and investment report writing.Template:Linebreak:Check with your employer before enrolling in any such courses. Your company may have a program to reimburse you for education costs. You may also be entitled to salary increases in relation to the courses that you take.

Landing a Job as an Equity Analyst

1. Get hands-on experience through an internship. One of the best ways to gain experience is to work in an internship while you are studying. Some schools may offer internship programs for undergrads, while other internship programs are for graduate students only. You should try to take advantage of any internship opportunities that you can.
   • As an intern, you will be assigned to one or more mentors in the company where you work. This supervision extends your education while giving you on the job experience.
2. Decide on your professional focus. In the profession of working as an equity analyst, there are two primary directions to go. You may choose to be a sell-side analyst or a buy-side analyst. Template:Linebreak:Your work in an internship may help you develop a preference for one or the other. Before you begin applying for jobs, you should at least understand the two types of positions and be aware of the focus for the companies where you apply.
   • A sell-side analyst often works for a large investment bank. This person’s job generally consists of researching the financial outlook for companies that the bank is considering taking public. You will be charged with deciding which companies have the potential of earning the most money in the future.
   • A buy-side analyst works for mutual fund brokers or financial advisory firms. In this role, you would research companies that are in your employer’s portfolio and other companies that represent profitable investments.
3. Begin building a network of professional colleagues. A good stock market analyst is not just someone who conducts research. You need to be a “people person” as well. Build up strong personal relationships with people you meet along the way, in your internship or in your classes. These people may be useful in providing references for future job applications or links to job opportunities.
4. Present yourself well with a strong cover letter and resume. For many jobs, the cover letter is merely used as a way to transmit your resume. In the business world, however, your energy and writing skill will be judged right from the beginning. You need to highlight whatever relevant experience you have and express your desire to work hard in this demanding field.
5. Prepare for your hiring interview. Research the company and its past business practices. You will want to be able to speak intelligently about the company and the position you are interviewing for. In addition, you should be prepared to discuss your internship and prior stocks you have researched. Template:Linebreak:A common question, particularly for a position in a top-level company, would be to ask you to discuss one or more particular stocks that you have studied, and explain why you would or would not recommend them to a client. In short, you need to be prepared to be put on the spot just as you would on the job.Template:Linebreak:Through your interview, you need to project enthusiasm as well as intelligence. You need to show that you are able to analyze stocks, make decisions, and communicate your thoughts clearly.

Earning Advanced Certification with a CFA

1. Investigate a joint MBA/CFA program. The most useful certification for an equity analyst is the Chartered Financial Analyst, or CFA. There are other certifications, but the CFA is the most likely to be beneficial. Template:Linebreak:Some top business schools offer MBA programs that include study for the CFA certification. The CFA Institute has partnered with 41 graduate schools to provide CFA instruction as part of an existing MBA program.
   • A joint MBA/CFA program lets you prepare for and earn the CFA certification more efficiently, while enrolled in your MBA program.
2. Complete four years of work experience. Before you can apply for the CFA certification, you must complete 48 months of relevant work experience in the financial field. This work does not have to be specifically in a role as an equity analyst. The definition of relevant work is fairly broad and can include such areas as trading, economics and corporate finance.
3. Prepare for the CFA exams. To earn the CFA charter, you must pass three successive levels of exams, in order. The Level I exam is offered in either late spring or fall, while the Level II and Level II exams are offered only once a year, in the late spring. Template:Linebreak:The passing rate for the exams is very low, so you should plan to study hard for it. The CFA Institute, that administers the exam, estimates that applicants should plan at least 250 hours of study for each level.
   • Each level consists of a six-hour exam, covering a wide range of topics related to the financial field. The general range of topics includes:
     • ethics and professional standards
     • quantitative methods
     • economics
     • financial reporting and analysis
     • corporate finance
     • equity investments
     • derivatives
     • alternative investments
     • portfolio management
     • wealth planning. 
   • The CFA Institute publishes free study materials online, which you can access at https://www.cfainstitute.org/programs/cfaprogram/Pages/index.aspx. In addition, you can find many commercial materials or study programs with a simple search online.
4. Register for the CFA exams. You can learn more about the CFA program and the exams at https://www.cfainstitute.org/programs/cfaprogram/Pages/index.aspx. On that page, follow the link to “Register” in order to begin your application. That page contains everything you need about registering for the exam and applying for CFA certification after you complete all requirements.
5. Keep your employer advised of your progress and certification. Before you even begin a CFA program, you should discuss your plan with your direct supervisor. Template:Linebreak:Some companies will value this certification, while others may not place such a premium on it. You will be dedicating a great deal of time and effort to your study, and you need to know that the work will be beneficial.Template:Linebreak:Assuming that your application is successful, you should then notify your supervisor when you obtain your certification. This good news should be entered in your personnel file and should help you advance in the company.

References

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