ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos


Personal Finance Videos 838 videos

Finance: What Does a Financial Analyst Do? 320 Views


Share It!


Description:

What does a financial analyst do? Financial analysts research the market and recommend investments. There are quite a few licenses required to be a financial analyst, so the beginning period of this job requires a lot of studying. After a few years, ideally the analyst is spending their time making investment recommendations.

Language:
English Language

Transcript

00:00

what does a financial analyst do? well this and this and this.

00:10

so after all that analyzing of financial data what does the analyst actually do?

00:15

well she makes recommendations to you know do stuff. generally so that [man frowns at camera]

00:20

investors can make money or not lose money. and to be clear financial analysts

00:25

come in a few different flavors. pick an analyst who works for a stock brokerage

00:28

for example. well they produce reports which the brokerage then gives to

00:32

clients hoping that it will incentivize its clients to trade with the firm and

00:37

give the firm its business, which of course generates commission for the

00:41

stock brokers in theory. the goal here is to make money for the client. but the

00:45

more near-term goal is to you know get the client to pay attention to the firm.

00:49

this is a subtle but very important difference from a financial analyst who [one man stands behind another and shouts]

00:53

works for an investment company ie one who actually invests money for clients

00:58

and is evaluated based on the performance of those investments. a

01:02

financial analyst inside of an investment company like fidelity or

01:06

Franklin or American Funds cares only about how well the investment does. the

01:11

financial analyst does not have to juggle clients or worry about marketing

01:15

to non-professional investors or generating commissions for the firm. all

01:20

they have to worry about is beating the market or their index or whatever

01:23

benchmarks are set out there for them .in addition there are two flavors of [woman hits punching bag]

01:26

financial analysts on Wall Street more or less .by side -those are extensions of

01:31

hedge funds and private equity funds and venture capital funds and mutual funds-

01:35

they're all the people who analyze things from the perspective of a buyer

01:39

only like they buy the stuff they don't have to keep clients happy and get

01:43

Commission business. then you have the sell side which are largely just [graph showing stocks]

01:47

extensions of stockbrokers. stockbrokers hire the analyst to give smart opinions

01:52

on buying selling and holding stocks such that well they can go talk to their

01:56

clients about it and win Commission business from getting them to trade

01:59

through them by recommending Microsoft at forty two dollars and twelve cents

02:03

and stuff like that. there are financial analysts who work for the government as

02:07

well. these guys are usually housed in hell-like divisions of the government

02:11

called the Fed which assesses whether or not the [man in dark glasses behind computer]

02:14

economy is heating up cooling down or see-sawing like a spring day in Chicago.

02:17

well here a financial analyst might be sampling the prices of a half gallon

02:21

carton of GMO milk at 500 grocery stores around the country. they then use that

02:26

data to figure out if the country is feeling inflation deflation or just

02:30

boredom .financial analysts exist inside of corporations as well.

02:34

corporate analysts perform market evaluations to try to help companies [man smiles at camera]

02:38

sell more product for more profit which in turn fuels the company's growth and

02:42

all that other fun stuff. so yes being a financial analyst might not be the

02:46

flashiest job in the world but just think about all that Ben and Jerry's you

02:50

can buy once your commission comes through. [people cheer the ice cream truck]

Related Videos

Finance: What is Bankruptcy?
260 Views

What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...

GED Social Studies 1.1 Civics and Government
39794 Views

GED Social Studies 1.1 Civics and Government

Fake News
11938 Views

How do you tell fake news from real news?

Finance: What is a Dividend?
1777 Views

What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...

Finance: How Are Risks and Rewards Related?
589 Views

How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...