How to Become a Stock Analyst

About Stock Analyst

A Stock Analyst is a person who analyses the company’s investment, provides recommendations and tracks investment data. Nature of those investments will vary from company to company. Some of the major tasks performed by a stock analyst are utilizing data analysis to predict the gains and earning of a company, giving advice to the clients on management whether to purchase or sell, participating in meetings, conference and other events, providing support to the senior stock analysts and evaluating the annual reports. 

There are two types of stock analysts namely Buy-Side Analysts and Sell-Side Analysts. Buy side stock analysts work with the fund managers at financial firms and mutual fund brokers and on the other hand, sell side stock analysts are those who work for large investment banks. Roles of both types of the stock analysts will totally depend on the type of industry they are working in.

Candidates who are interested in analysing the stock market can opt for a career as a stock analyst. However, they must have strong analytical and quantitative skills to work as a stock analyst. Stock analysts are mostly hired by banks, stock-broking firms, insurance companies and mutual funds companies. 

Eligibility to become Stock Analyst

Candidates must meet the minimum eligibility criteria set out below if they are interested in this career.

Education: Candidates who are looking for a job as stock analyst must have cleared an MBA degree in Finance, Economics or Statistics stream. Those who have completed a bachelor's degree in Finance and Economics can apply for trainee profiles in stock analysis. There is no licensing requirement for starting a career in stock management. Although, candidates who have some certification in the finance-related field will have great chances fo a successful career as a stock analyst. They can get a  certificate of registration from SEBI before applying for a job.

Experience: Most of the companies prefer experienced candidates over freshers for senior roles. Candidates must gain some experience by working as a trainee in stock management companies. They can also complete a certification or training program before applying for a job as a stock analyst.

Skills: Candidates who are applying for a job as a stock analyst should also have some additional skills apart from academic qualifications. Some of the important skills required for a stock analyst are listed below.

• Computer skills
• Research skills
• Self-starters
• Communication skills
• Organizational skills
• Analytical skills:
• Quantitative skills
• Problem-solving skills
• Passionate about the stock market

Types of Job Roles Stock Analyst

Major job roles of Buy-Side Analysts are performing research on employers’ portfolio of the company and calculating the risk and gain before buying a stock. While major roles of Sell-Side Analysts are providing reports to the firm’s clients and providing recommendation about the expected performance of a stock. Some of the available job roles for stock analysts are listed below. 

• Financial Analyst
• Research Analyst
• Security Analyst
• Investment Analyst
• Quantitative Risk Analyst
• Business Analyst

Employment Opportunities for  Stock Analyst

A stock analyst can apply for a job at an insurance company. His job role will totally depend upon the job profile. Candidates can check the list given below to know all the available areas where they can apply for a job as a stock analyst. 

• Bank
• Insurance companies
• Stock-broking firms
• Mutual funds

Top Recruiting Agencies for Stock Analyst

There are many recruiting agencies for a stock analyst. He can apply at a bank, insurance company or any stockbroking firms. Some recruiting agencies are:

• Life Insurance Corporation of India
• Max Life Insurance Co. Ltd.
• HDFC Standard Life Insurance Co. Ltd.
• Zerodha
• Motilal Oswal
• Angel Broking
• Sharekhan
• ICICI Prudential Mutual Fund
• Aditya Birla Sun Life Mutual Fund
• Kotak Mahindra Asset Management Company

Pay Scale/Salary of Stock Analyst

Salary of a stock analyst will depend on many factors such as job profile, company, location and experience. An entry-level stock analyst with a work experience of less than one year can earn up to Rs. 3 lakh per annum. His average salary will increase with experience and skills. Candidates can check the table provided below to know the average salary of a stock analyst.

Books & Study Material to Become Stock Analyst

A stock analyst should have a good knowledge of the stock market. He should be able to provide good advice and recommendations to the clients for buying or selling any stock. A stock analyst can refer to some books to learn some skills and strategies related to stock management. Some of the books recommended for a stock analyst are provided below. 

• The Intelligent Investor by Benjamin Graham
• Common Stocks and Uncommon Profits by Philip A. Fisher
• Stocks for the Long Run by Jeremy Siegel
• Learn to Earn, One Up on Wall Street, or Beating the Street by Peter Lynch
• A Random Walk Down Wall Street by Burton G. Malkiel
• Irrational Exuberance by Robert J. Shiller
• Common Sense on Mutual Funds by John Bogle
• How to Make Money in Stocks by William J. O'Neil
• The Little Book of Common Sense Investing by Jack Bogle
• Reminiscences of a Stock Operator by Edwin Lefèvre

Pros of becoming a Stock Analyst

• Due to the growth of the financial sector, there are various opportunities for a stock analyst.
• A career as a stock analyst is challenging as well as rewarding. Candidates who are interested in managing financial activities will surely enjoy working as a stock analyst.
• Stock analysts are paid more as compared to other profiles in stock management.
• Candidates will be able to learn new strategies for the stock market. 

Cons of becoming a Stock Analyst

• Job as a stock analyst is stressful. They spend most of their time in client meetings and travelling.
• Sometimes stock analysts have to work for long hours. 
• Stock analysts have to deal with many challenges in the stock market. They should be able to tackle those challenges.
• The stock analyst has to pay attention to the details. He should be aware of all the risks which exist.