Learning is a continuous process and is often underrated.
With each passing minute of your life you learn and unlearn new lessons both personally and professionally.
You either learn new things or validate/modify/discard the previous learning on a day to day basis.
I have always believed that you can learn various subtleties from anything and anyone.
In this article, I will tell you what all you can learn from a financial analyst or in other words what ideas you can steal from financial analysts to learn succeed and perform better in your career.
In the following text, I have tried to divide the content in two parts for a better understanding.
The first part will throw light on all the things that you can learn from financial analysts that will not only help you in your professional life but also in personal life.
The second part is more related to your daily tasks as a professional and will also assist you in making more money and managing your finances.
1. Managing personal and professional life
Financial analysts are famous (or infamous) for working long hours and being in office working at wee hours of the day.
Their job requires them to spend extended hours on the work floor to accommodate client requests and ensure quality output.
This usually makes them an expert in time management.
You can learn from them how to prioritize tasks and manage their limited time. I personally have learnt an important thing from financial analysts i.e. important urgent matrix.
You should always try and categorize your tasks in this matrix and see for yourself what the priority at that point in time is.
Following is an example of this matrix:
2. Insider info on investment banks/private equity firms
Many a times theory is very different from practice and the finance world is not untouched from this phenomenon.
Whatever you might read or hear outside the work environment, in not always necessarily completely true.
There are a few things that you would come to know after you become a part of the system.
You can get clarity on financial firms by talking to financial analysts.
There are two major reasons for this, one – financial analysts are the ground workers of any company and they are the people who do the maximum work.
They are an integral part of the entire system and know the very basics of what it takes for a finance company to work.
And two – they are likely to give you the correct picture of the situation as they are not usually a part of office politics or groups.
3. How to prepare for job interviews
Since these people are still at the beginning of their career, the memories and learning of their job interviews is fresh.
They can guide you in an apt way to sneak your way through to a financial company.
Also, as they are the work horses, they would be able to give you the exact requirements of what it takes to become a part of any financial company.
You can learn from their experiences and implement that learning in your job interview or in the job if you are already through.
4. Interpersonal skills
Either on the sell side or buy side of the horizon, financial analysts always have to interact with the external parties for data collection, validation and reporting.
This helps them develop interpersonal skills of dealing with other professionals.
You can learn mannerisms, jargon, nomenclature and business etiquette among many other small things required to succeed in financial firms.
Although, these things do not have a direct and immediate impact on your growth and development, but in the long run you will realize how important they are in shaping up your career.
5. Acquiring other skills
In addition to the above mentioned things there are hundreds of other things that you can learn from financial analysts.
Right from the concepts of finance, their application to their implications, you can become well versed with all those things that you had earlier studied or read on the internet.
1. How to analyze a stock for investing
This is what most of the financial analysts do at their work place day in and day out.
You can learn the tricks of the trade straight from the horse’s mouth on how to analyze a stock before investing.
They know exactly what kind of information to look at for doing such analysis and where to find that information.
They will know the most authentic and reliable sources of fetching information on various companies and stocks which is not a common knowledge for a lay man.
Apart from the company financials there are many other sources to find this information.
More importantly they know how to use the available information to arrive at a decision of investing money.
You could learn from them how to make sense out of just a few numbers and figures.
2. Where to invest your money
Investing in the right stock or investment avenues is of utmost importance both for companies and individuals.
Financial analysts track multiple industries and hundreds of companies on a day to day basis, and are also well versed with the overall market and economic situations.
They are the best people to tell you where to expect future growth and ultimately higher returns at a later stage.
Please note that financial analysts make their predictions on the basis of some assumptions and forecasting tools, therefore I would not suggest you to blindly follow them.
Use your own intellect and analyze the situation on your own before arriving at a conclusion. They can only help you in arriving at the right decision; they cannot take that decision for you.
3. When to buy a stock
Financial analysts work around futures, options and derivatives while working in capital markets, therefore they are so called experts in capital markets and stock exchanges.
They keep a regular track record of target companies and the performance of their stocks.
Using their own analytical tools they determine the health of the company and predict its performance.
This helps them in forecasting the future movement of the company’s stock prices.
They could help you in identifying the appropriate time of buying a stock depending on the predictions of the company, the industry, stock exchange and the overall economy.
This comes after hours and hours of reading and talking to the stakeholders, which is exactly what financial analysts do.
You can learn how to determine the best buy price and also the best buy time for various stocks.
They also keep a close eye on upcoming IPOs and additional issuance of a company’s authorized capital, and can suggest you to buy fresh stocks at a rational price.
4. When to sell a stock
No stock is ever bought by any individual or a company for its emotional value; it is always bought with an intention to sell at a later stage at a profit.
Financial analysts for their own work always determine a target price of stocks to sell at a later stage.
This is a very thorough process and needs a lot of analysis and groundwork to arrive at.
You can learn from them what all parameters to consider for deciding a target selling price of a stock.
Usually you should stick to the target price, but there are instances wherein the sale is sometimes premature or post mature.
These subtleties no one can teach you from books or through an internet program, this has to be learnt on the ground.
You can make good use of this learning of financial analysts for determining the target selling price of a stock.
5. Financial modeling
Financial modeling in itself if a very vast and complex subject area, and takes years of practice to arrive at some level of expertise.
Since financial analysts’ work revolves around these models, they can make you grasp the concepts real fast and easily.
Either working on an existing financial model or building a new model, these analysts will have deep understanding of formulae and functions of analyzing a set of data.
You could also learn smart use of Excel and VBA macros for preparing models.
You need not go through a rigorous program, rather spend some time with financial analysts, who can tell you the basic and important concepts in a day or two.
However, I personally believe that to gain expertise you need to go through a proper training of financial modeling.
6. Other finance concepts
Apart from all the things listed above you can learn a bunch of other stuff which would help you in improving your finance knowledge.
Financial concepts like time value of money, discounted rates, reading financial ratios and understanding their meaning, reading a balance sheet and income statement are some of the many things that a financial analyst has and that you can learn for your own benefit.
Trust Me 🙂
If you've ever wondered why financial analysts are considered knowledgeable, you may have your answer.
How much importance do you place on learning financial analysis skills? Are there any other lessons to learn that I didn’t mention here?
I hope this article gave you an idea of how to learn lessons from a financial analyst for succeeding in your personal and professional life.
If you have any doubts or queries, please do not hesitate to write back and I will be happy to answer all your questions.
Image credit – stonemoor (dot)co(dot)uk