A lot of us are into stock broking and buy and sell equities on a regular basis. We need information on which equity to buy and which equity to sell all the time. We largely rely upon experts’ advice for this. These experts are officially known as sell side analysts. A sell side analyst’s job is to recommend stocks to people. Other than that, a sell side analyst writes a Sell Side Equity Research Report that is expressive of his or her opinion. The report will generally be a research on why some stock is or isn’t a good investment.
The sell side equity research salary is around 60 to 90 thousand dollars. Apart from the sell side, there is also a buy side research analyst. While a sell side analyst works in a stock broking firm, a buy side research analyst has to do with mutual funds. In this article, I will only concentrate on a sell side research analyst and not on the buy side research analyst.
A sell side equity research interview is most of the time practiced and trained. Stocks that are rated sell in these interviews aren’t considered to have much potential. These equities will tumble down soon because they have been rated sell. Equities that are bound to go up are rated as buy. A sell side equity research analyst will tell you whether you should buy, sell or hold a particular stock.
These analysts are appointed by Equity research firms for giving advice to customers. These research analysts develop secret methods of recommending the stocks. I have come across a lot of people who blindly follow the advice given by experts, but should they? We take a look… I will briefly point out 3 secrets of these analysts to you in this article:
1. The individual investor isn’t a priority
This is the bitter truth but it is the way it is. Equity researches aren’t carried out with the purpose of helping out individual investors. In fact, an individual investor is the last thing on the mind of an analyst while conducting a research.
2. The stock depends on the statements of the analyst
Yes, even this is true and it would strike you immediately if you applied logic and common sense. When an analyst rates the stock as sell, those who follow his or her advice, sell the stock almost instantly. This obviously results in a fall in the prices of these stocks. Hence, it would be safe to say that the plight of the stocks is largely dependent upon the sell side research analyst.
3. Unqualified analysts
Ideally speaking, an analyst ought to have an MBA degree and a CFA certification. However, the bitter truth again is, only 3/4th of the sell side analysts are qualified while the others simply learn on the job. Most of them aren’t MBAs or CFA certified.
Therefore, it is very easy to make a successful career as a sell side research analyst. Owing to scarcity in the market, the demand for qualified sell side research analysts is high.
To be top-class equity research analyst, you have to be yourself.
Be more of yourself and start polishing your skills.
Many students are working on it. And you?