Monday, December 9, 2013

How to Become an Equity Research Analyst

An Equity research analyst study companies for investment purposes. The equity analyst researches trends in an industry, location or type of product. Investors use this information to predict the future of stock prices. An equity research analyst spends his time reviewing data regarding financial transactions surrounding equity in property or financial instruments. This job is very similar to financial, securities, or investment analysts. A Sell-side equity analyst work for companies that sell their research to clients; buy-side equity analysts are employed by banks, mutual funds and hedge funds who use their research to inform their own stock purchases.

People who have an analytical thought process, enjoy working independently, and are comfortable exploring multiple scenarios find the greatest satisfaction in this type of work. The most important skill for an equity research analyst is data manipulation and management. Attention to detail, discipline, and focus are all essential for anyone who wants to work as an equity research analyst. Most equity research analysts have at least a college degree, and many choose to become chartered financial analysts.

Pursue an undergraduate degree in Economics, Finance or Business. The undergraduate degree in finance, economics or business prepares the student for an entry-level position in an investment firm. The 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.

Complete a Master's Degree program in Economics, Finance or Business. A graduate degree increases the employment opportunities available to individuals. Students 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 to prepare the student to work in the finance industry. Courses include international finance, financial strategy, and corporate finance theory and equity valuation.

Complete an internship program in Finance. A graduate degree program may provide the student with an opportunity to complete an internship in an investment firm or business. The internship provides the student with hands on training in finance and equity analysis. Employers consider internship experience in other organizations when making hiring decisions for financial positions. An internship can lead to an offer of employment after completing an MBA program for students.

Seek professional certification. Professional certification improves the chances of employment as an equity analyst after completing a graduate degree program. The CFA Institute offers the Chartered Financial Analyst (CFA) credential to candidates who meet the educational requirements and pass 3 levels of examinations. Candidates to become CFA must also have work experience in the field to qualify for certification. Students may study for the examinations while obtaining the required work experience. Becoming a CFA charterholder opens many doors, and some employers even assist with the costs associated with the program. Most senior equity analysts and portfolio managers are CFAs.


Search for a position as an Equity Analyst. Equity analysts may find positions through professional recruiters who specialize in the financial industry. Job boards and classified advertisements are additional methods for finding a position in the field. An entry-level position in the financial industry may lead to a position as an equity analyst as well.