MyStemKits STEM job of the week: Financial Analyst
This week we look at financial analysts, from the title of their occupation one would think to know exactly what they do but after this journey, you just may think differently.
Financial analysts are known to keep their fingers on the pulse of the economy. To help their client’s growth, they keep up with current economic trends, business news, and company strategies. After analyzing the information they gather, they advise their clients when to buy and sell investments. As a part of their research process, financial advisors also write reports that explain their analyses.
The position of financial advisor is very profitable but they pay the price by working between 50 to 70 hours a week. The position of financial advisor is very demanding, typically financial analysts do the following:
- Recommend individual investments and collections of investments, which are known as portfolios
- Evaluate current and historical financial data
- Study economic and business trends
- Examine a company’s financial statements to determine its value
- Meet with company officials to gain better insight into the company’s prospects
- Assess the strength of the management team
- Prepare written reports
The focus of a financial analysts is to evaluate investment opportunities. They generally focus on trends affecting a specific industry, geographical region, or type of product. They must understand how new regulations, policies, and political and economic trends may affect investments. For these reason, an analyst may be employed by banks, pension funds, mutual funds, securities firms, insurance companies, and other businesses. Financial analysts are also called securities analysts and investment analysts.
Financial analysts can be divided into two categories: buy-side analysts and sell-side analysts.
- Buy-side analysts develop investment strategies for companies that have a lot of money to invest. These companies, called institutional investors, include mutual funds, hedge funds, insurance companies, independent money managers, and nonprofit organizations with large endowments, such as some universities.
- Sell-side analysts advise financial services sales agents who sell stocks, bonds, and other investments.
Because investment is becoming more global, some financial analysts specialize in a particular country or region. Companies want those financial analysts to understand the language, culture, business environment, and political conditions in the country or region that they cover.
Below are a few examples of the other types of financial advisors
- Portfolio managers – select the mix of products, industries, and regions for their company’s investment portfolio. These managers are responsible for the overall performance of the portfolio. They are also expected to explain investment decisions and strategies in meetings with stakeholders.
- Fund managers – work exclusively with hedge funds or mutual funds. Both fund and portfolio managers frequently make buy or sell decisions in reaction to quickly changing market conditions.
- Ratings analysts – evaluate the ability of companies or governments to pay their debts, including bonds. Based on their evaluation, a management team rates the risk of a company or government not being able to repay its bonds.
- Risk analysts – evaluate the risk in investment decisions and determine how to manage unpredictability and limit potential losses. This job is carried out by making investment decisions such as selecting dissimilar stocks or having a combination of stocks, bonds, and mutual funds in a portfolio.
According to the Bureau of Labor Statistics, financial analyst positions are expected to grow by 12 percent, creating 32,300 more jobs by 2024. The growth rate of a financial advisor is much faster than the average for all professions and the competition for these jobs is fierce, especially among analysts that will be new to the field.
To motivate and assist our future advisors, MyStemKits.com offers the following kits…
POPULATION DEATH DEMOGRAPHICS KIT
Featuring 500 tiny tombstones, this kit mirrors actual population statistics with regard to the age and gender of members of a population at their death. This kit is a full classroom set.
BALANCING CURRENCY KIT
Reinforce the understanding of the value of coins and currency with this innovative kit. Use specially-weighted coins on our balance to allow students to explore the value of combinations of coins and/or dollars.
This collection of kits is designed to create an open environment in which students can run a variety of probability exercises. Simply set up a problem and let the students determine the best way to run a simulation of the scenario using any of the provided kits. Includes some dice as well as the following available as standalone kits:
- Alphabet Coins Kit (3 hrs)
- CD Spinner Kit (2.5 hrs)
- Loaded Coins Kit (0.5 hrs)
- Loaded Dice Kit (0.5 hrs)
Financial Analyst is ranked #25 on the US News top 25 STEM Jobs list.