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The stock market is where the public can come to buy or sell equity holdings in corporations. It is a very large market. For example, the New York Stock Exchange had a market capitalization of over $28 trillion at the end of June 2018. Such a huge market will naturally spawn a lot of lucrative jobs. For those that might want a change of career after adequate consideration, we will take a closer look at four of the best careers in the stock market arena.
Careers in Financial Services are some of the most challenging and rewarding careers. It is certainly one of the higher-paying industries and the last few years has seen renewed hiring and plenty of opportunities if you know where to look.
1. Portfolio Managers
These are the people responsible for managing investment assets in the form of stocks and bonds for specific individuals, families, and or institutional bodies. Usually, the portfolio manager follows a mandate agreed with the investor, then carefully screens stock with tools like the FinViz Screener for the construction of the client’s portfolio. At other times, the mandate is pre-defined and then the investing public can buy into it, as in the case of mutual funds. They constantly evaluate portfolios under their management to ensure that the mandate is being followed and the investment objectives are being achieved.
An undergraduate degree in finance, economics, or any management science is a basic requirement. Some years of experience in Asset Management is also a must. Then there is the statutory FINRA Series 66 license, and then one or more professional qualifications, with the Chartered Financial Analyst (CFA) charter being the most recognized. Portfolio managers’ remunerations are very competitive with a lot of bonuses, especially when investment targets are met or exceeded.
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The buying and selling of stocks are usually done by highly trained licensed individuals called stockbrokers who are themselves employees of brokerage firms. These firms are members of the exchange that are allowed to trade on behalf of other individuals and firms. The brokerage firms charge a fee or commission for each trade, but compensation for the traders usually comes as monthly emoluments and productivity bonuses. It is one of the most highly paid jobs in the finance industry.
Stockbroker jobs require, at the minimum, a bachelor’s degree in finance or economics to be employed in a brokerage firm. Then one or more licenses will be required and these licenses can only be obtained by passing one or more licensing examinations. These exams vary according to country, In the United States, one has to hold at least the FINRA (Financial Industry Regulatory Authority) Series 7 and series 63 or 66 licenses and be sponsored by a broker-dealer or investment firm that is a member of the exchange. The job requires that the individual be able to perform under stress. Applicants for this role must be highly focused and analytical with good communication and strong interpersonal skills.
3. Financial Analyst
This is a very important role in the stock market industry and analysts are found both on the buy-side and the sell-side of the market. Financial analysts can be qualitative or quantitative. Either way, they serve to advise traders, portfolio managers, and a lot of other decision-makers in the industry. Quantitative analysts look at trends and crunch numbers to try and predict which direction a stock, or even the market, maybe going. Qualitative analysts do a holistic review of a company, its fundamentals, its industry, and the general economy, to try and predict the direction its stock is going.
Financial analysts must have a minimum of a bachelor’s degree preferably in the management field, economics, or even mathematics. They are expected to have strong analytical and excellent communication skills to be recruited into a firm. After recruitment, they are taken through rigorous training in securities analyses if they do not already possess relevant professional qualifications. The Chartered Financial Analyst designation is the premium professional qualification for practitioners in various fields of the investment management industry.
Photo by Austin Distel on Unsplash
4. Investment Banking
This is the field of banking that is dedicated to raising capital for other companies or even government bodies. Investment banks analyze and underwrite new debt and equity issuance for most private corporations, government agencies, and municipal councils. They handle most large and sophisticated banking transactions as well as provide financial advisory for large corporations. They help to arrange mergers and acquisitions and help in the sale of securities by facilitating trade for institutional and private clients. In essence, they are the go-between for companies and investors.
Investment bankers are arguably the best-paid professionals in the finance industry. This is quite fitting as their job requires very specialized knowledge and extensive training. Educational requirements start with a minimum of an MBA, and most times the rigorous CFA professional charter is also a requirement. Extensive on-the-job training also goes into making an investment banker.