How to Enter the World of Stocks, Bonds, and Other Investments
The price of gold has risen over the past decade, from an average of $279 per ounce in 2000 to approximately $1,600 per ounce today. And gold continues its upward momentum, making it economically viable for gold mining explorers, developers and producers to operate. But with today's abundance of gold stocks, how is a consumer to know which ones are good investments?
That's where a financial analyst's expertise is, well, priceless.
What financial analysts can expect from the job
Along with stocks, financial analysts evaluate bonds and other investment vehicles, according to the U.S. Bureau of Labor Statistics. Oftentimes, they follow trends affecting a specific sector (such as precious metals), geographical area (say, Africa) or product (such as the foreign exchange market). They educate both individuals and companies about potential investments and help them decide where to put their money.
These finance professionals, also called investment or securities analysts, work at banks, securities firms or insurance companies and for pension or mutual funds and other businesses. They tend to be either buy-side or sell-side analysts.
Buy-side analysts develop investment strategies for institutional investors -- firms with large amounts of money to invest, including mutual and hedge funds and insurance companies. Sell-side analysts advise agents who sell investments.
Portfolio managers, fund managers, ratings analysts and risk analysts all are different types of financial analysts.
The workweek for financial analysts typically exceeds 40 hours, and it's common for them to put in 50 to 70 hours per week. Much of their research gets relegated to after office hours because they're busy during the day with phone calls, meetings, deadlines and visits to companies or possible investors. According to 2011 data from the Bureau of Labor Statistics (bls.gov, 2012, the nationwide median salary for a financial analyst is $36.37 per hour, or $75,650 per year. Those making top salaries may earn up to $145,580.
Becoming a financial analyst
Financial analysts typically start by specializing in an investment field. For entry-level positions, a bachelor's degree in a related subject such as finance, economics, accounting, business administration or statistics is a must, the BLS notes.
With more experience, financial analysts may move into a position as a fund manager, managing large investment portfolios for individual investors. Or they might become a portfolio manager, overseeing the firm's analysts and choosing the investments for its portfolio. These and other advanced positions generally require a master's degree in either business administration or finance. Obtaining one's master's degree may provide job applicants with a competitive edge. A number of degree programs are offered in business, encompassing both bachelor's and master's in subjects suitable for this career.
With the number of available jobs in the financial analyst profession expected to grow 23 percent from 2010 through 2020, faster than the average for all occupations, the job prospects for financial analysts look promising. More financial products available for trade, increasingly complex portfolios and a demand for geographic expertise due to emerging markets are all helping to spur this increase. Learn more about pursuing a degree online and beginning a new career as a financial analyst.