Equity Research

A career in equity research may be ideal for you if you enjoy understanding the functioning and structural compositions of different types of organizations. This career path is for people who enjoy and understand financial modeling and developments. This career path requires disciplined individuals who have the ability to, as the job title itself suggests, conduct thorough research.

Equity researchers must be flexible in terms of their mindset, but they must be absolutely rigid when it comes to meeting deadlines. Punctuality and timeliness are the two most important characteristics any entry level professional in this field must possess.

A career in equity research entails conducting reviews of various stocks, bonds, financial investment opportunities etc and then producing extensive, neutral, factual reviews on them. Equity researchers conduct extensive studies and then on the basis of these, they advise others on potentially lucrative equities.

The research conducted by equity researchers generally involves studying the official materials published by the company issuing that equity, including annual financial reports, company statements, sales reports, revenue statistics etc. Moreover, equity researchers take into account the market conditions prevailing, and they anticipate future trends before publishing their research.

Most equity researchers are assigned a certain group of companies that they are expected to follow. They must note down all their findings and then present them in a simple manner to all their clients in the form of formal presentations and reports. However, there are many equity researchers who choose to specialize, not any in group of companies or a particular industry, but in fact in studying the contemporary market conditions. They study how external pressures can impact investments in a particular region.

While most equity researchers end up working as employees, some work on a freelance basis by which they do their work independently, and then sell copyrights on a case by case basis to larger organizations, who then share this information with their clients. However, this is not the preferred path as earning potential is much lower and such freelance equity researchers lose out on the fringe benefits available to employees of large investment companies.

In terms of qualifications, equity researchers must have at least a bachelor’s degree, preferably in the disciplines of business, finance, commerce or accounting. However, if one really wants to stand out when applying for an open position in a good organization, a master’s degree in one of the above subjects works wonders. Furthermore, internship experiences can often play a decisive role in determining whether a particular candidate gets a job or not.

According to the Bureau of Labor Statistics, the average salary earned by equity research analysts in the United States of America is US$ 85,240 per annum. However, in this field, there is a lot of potential to earn higher salaries as they progress on the career ladder. Senior equity analysts can earn anywhere from US$ 300,000 to US$ 700,000 per annum.

In India, equity researchers salaries vary largely based on who they end up working for. A trainee with an MBA in finance can get Rs. 2 lakh to Rs. 3 lakh a year. The most highly paid equity researchers end up working for multinational investment companies, and they earn anywhere up to Rs. 350,000 per month, although the average salary is around Rs. 100,000 per month for an experienced equity researcher.

People who work as equity researchers work in offices all day long five days a week. They normally work typical office hours from 9am till 5pm. Live in the career involves conducting extensive research and so people in this profession spend a lot of their time everyday sifting through paperwork and in front of a computer screen. There is little traveling or leaving the office during work hours in the life of an equity researcher.

There are a number of reasons why there is a lot of competition for equity researcher jobs. No two days at this job are the same. Despite its office oriented nature, market conditions keep changing and so there is always new material to research and analyze.

This is one career path that actually involves extensive research and mental exercise. Equity researchers produce an end product that they can be proud of. Their name is normally published on whatever research they produce, and so they have something to show for the long and difficult hours they put into their job on a daily basis.

If this is not enough motivation for anybody to become an equity researcher, the high level of salary and the constant opportunity for bonuses, fringe benefits and increments are an additional perk.

The biggest downside in this profession is the low level of jobs that are available to new entrants in the discipline. With unhealthy economic conditions prevailing, getting a job is difficult and there is a stiff level of competition for the few positions that are available.

Moreover, there is a large level of alienation and lack of appreciation within this field. Your work, no matter how brilliant it may be, will quickly be forgotten because of the fast paced nature of the field of investments and equities. As a result, job satisfaction is often low among equity researchers.

There is a stiff level of competition for jobs in the field of equity research. This is because of both demand and supply side factors. On the demand front, due to the high number of perks, there are a large number of people who want to become equity researchers. However, this does not fit in well with the economic climate prevalent, which has resulted in a very low level of jobs available. As a result, only the most qualified and experienced equity researchers find themselves with good, secure jobs.

In terms of location, larger cities seem to be filled with more opportunities for people. This is because of the establishment of businesses and investors in these urban areas that demand the services of equity researchers. Therefore, in India, the metropolitan areas where businesses thrive remain the best locations in the country to be an equity researcher.

You should have an MBA, preferably in finance. Invest your initial years in understanding the markets and practising technical and fundamental analysis. Apart from this, basic knowledge of the exchanges such as NSE and BSE should be clear.