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Finance Definitions Videos 674 videos

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Finance: What Does a Financial Analyst Do? 320 Views


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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:
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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]

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