Investment Analyst

What is an Investment Analyst?

Investment Analyst is a person who presents his investment advice (buy, sell, hold) to their clients or portfolio managers after conducting thorough financial analysis, preparing financial models and correlating the impact of economic conditions on the related investment.


The work of an investment analyst depends on the type of employer. For e.g. They are hired by investment management firms to help their fund managers for making specific decisions regarding investments, while brokers, investment banksInvestment BanksInvestment banking is a specialized banking stream that facilitates the business entities, government and other organizations in generating capital through debts and equity, reorganization, mergers and acquisition, more appoint analysts to provide advice to their clients or portfolio managersPortfolio ManagersA Portfolio Manager is an executive responsible for making investment decisions & handle investment portfolios for fulfilling the client’s investment-related objectives. Also, he/she works towards maximizing the benefits & minimizing the potential risks for clients. read more.

It focuses on the evaluation of financial and economic information related to a given company, and generate recommendation on whether to buy, sell or hold.

  1. Buy-Side: Mutual fundsMutual FundsA mutual fund is an investment fund that investors professionally manage by pooling money from multiple investors to initiate investment in securities individually held to provide greater diversification, long term gains and lower level of more and advisory firms appoint buy-sideBuy-sideThe term "buy-side" refers to entities that advise their clients like individual investors and institutional buyers on investments and securities purchases. Private equity firms, mutual fund companies, life insurance companies, unit trusts, hedge fund companies, and pension fund entities are examples of buy-side more analysts to identify investment opportunities in the market.
  2. Sell-Side: Investment banks and research firms appoint sell-side analysts to understand risk and investment related to investment and generate reports on specific companies.


#1 – Top-Down Approach

Concentrate on economic events and conditions and their impact on investment. For e.g. bank rates, unemployment rate, inflation rate, industry-wise performance, financial data of a company.

#2 – Bottom-Up Approach

Concentrate process by creating research reports by company, sector industry, economical data, etc. In this approach, priority is focused on the company’s financials and then approaching other factors affecting its business.

  1. Research on Company: Research regarding the company’s performance in the industry its significance and status.
  2. Analyzing: Present analysis on company financials like Profit and loss account, balance sheetBalance SheetA balance sheet is one of the financial statements of a company that presents the shareholders' equity, liabilities, and assets of the company at a specific point in time. It is based on the accounting equation that states that the sum of the total liabilities and the owner's capital equals the total assets of the more and cash flow statementCash Flow StatementStatement of Cash flow is a statement in financial accounting which reports the details about the cash generated and the cash outflow of the company during a particular accounting period under consideration from the different activities i.e., operating activities, investing activities and financing more.
  3. Generating Reports: Generating reports after analysis of financial data and summarizing the company’s financial condition, growth approach and value.
  4. Updating Knowledge: Meeting with company management, fund managers and brokers to understand their views and business approach in the market.
  5. Industry/Sector and Economic Analysis: analyzing economic factorsEconomic FactorsEconomic factors are external, environmental factors that influence business performance, such as interest rates, inflation, unemployment, and economic growth, among more affecting the company’s operations and overall business.
  6. Recommendation: After generating and analyzing information regarding the company’s financials, management approach, and future prospects creating recommendations based on reports.
  7. Update Knowledge: Continuously updating information is the important responsibility of an investment analyst, which never ends.



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  • Bachelor’s Degree: Important for entry-level jobs with subjects related to business like finance, commerce, economics with addition skillset like quantitative analysis, statistics.
  • Master’s Degree: For advancing in this profile many companies prefer master’s degree candidates in business management and finance.
  • Professional Qualifications: It takes several years to qualify and gain experience from institutes like Chartered Institute of Securities and Investments, CFA Institute, but they provide enough knowledge and experience to entry as well as an advanced level analyst.



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  • Understanding of Financials and Economics: The most important skill set is understanding of financials of the company as well as economics since these two components decide the business approach and future in the market.
  • Analytical: It must be with an analytical mind and able to create, analyze the given data.
  • Updated Knowledge: The analyst position continuously requires an update on current affairs, Bank rates, corporate actions, Government announcement, tax policies, company’s management, etc.
  • Basic IT Skills: Although an analyst does not require an IT background, some skillset will help investment analysts to generate reports and becoming efficient in working when there is work pressure. E.g., excel, VBA, SQL, etc.
  • Team Efforts: An analyst position is not a single person job but requires a team, which generates data, updates information in systems, analyze and provides reports. It is important for an analyst to work and sync with the team to become more efficient.
  • Communications: They might have to attend meetings with the company’s management, brokers, and traders and provide data and information generated, which requires a high level of communication skills.

Career Path of the Investment Analyst

#1 – Entry-Level

Graduates with relevant subjects start entry-level position as junior analyst. The function of junior analysts is to collect and update data in the system to generate financial reports.

  • While working as a junior analyst individuals can learn various techniques to acquire a skillset and at the same time can approach a master’s degree for advancement in this field.
  • The individual with a master’s degree might be offered the role of the senior analyst if he possesses a level of skillset and knowledge.
  • Senior analyst focuses on different categories of securities, while Planning, conducting, new projects, developing and updating data, meeting company management and presenting reports to clients. Senior analyst observes, understand and process work of junior analysts working under them.

#2 – Portfolio Managers

Over a period if the senior analyst was able to perform with a high level of accuracy and standards, he might be offered the position of portfolio manager. The function of the portfolio manager is to set strategy with various investments.

Financial Analyst vs Investment Analyst

CriteriaFinancial AnalystInvestment Analyst
DefinitionFinancial analyst generates reports to help the business make the necessary decision by analyzing financial data provided by the firm.This research to creates financial models, provide results and recommendation to clients, management regarding specific investment in securities.
FieldsFinancial Analyst is a wider term, which means many companies require financial analysts to understand their client finance, company finance, updating financial data in the system, etc.Investment analysts in niche terms compare to financial analysts since it focuses on various financial aspects and research related to available investment categories and presents their recommendation.
WorkAnalyzing quantitative data generated by the system, cost-benefit analysisCost-benefit AnalysisCost-benefit analysis is the technique used by the companies to arrive at a critical decision after working out the potential returns of a particular action and considering its overall costs. Some of these models include Net Present Value, Benefit-Cost Ratio more, analyzing financial data from various subsidiaries/ branches, business forecasting.Analyzing Economical data, Understanding the financials of a given investment, meeting with managers and presenting data.


Job profile and career prospects for investment analysts are good for individuals looking to build a career in the financial industry especially in investment. Job profile needs an individual who is ready to work under pressure, work hard while coordinated with the team and even might demand to work on holidays in casework arrives even with these levels of duties and pressure analyst profile provides a high level of job satisfaction and career growth. Many large firms like investment banks, financial institutions, insurance firms, brokers need analysts in daily operations. Individuals with the given skill set and level of qualification can reach profile up to portfolio managers.

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