Capital Markets Analysts: What They Do and How They Do It

Most of you are aware that finance is not only about investors and brokers that shout orders to each other on Wall Street. There are many different people that work to keep the wheels turning. One of those guys is capital markets analysts that try to make sense of all those data to help businesses make well-informed decisions about investments and financing. Thanks to these people, many businesses get reliable information that could help them take great leaps toward success in the fast-paced world of finance. In this post, we will talk about who these finance gurus are, what they do, and what a regular business day of a capital markets analyst is like. So buckle up, grab something to drink, and enjoy the article.

What Do These Guys Do?

You might see a person who sits all day, looking at some charts, numbers, and other data about finance, and think, “What does this capital markets analyst guy do?” but might be a little too shy to go and ask them. Well, you might find peace after you read this article.
To start with, a capital market analyst gets the relevant data from several sources, analyze them, and gives the needed info, which is used to make more informed decisions about the financial affairs of a business. When I say business, I use it liberally as these market analysts can work in banks and hedge funds as well as for the government or other regulatory bodies. Naturally, these people have to have a strong understanding of the securities market and all the various factors that drive it. Plus, they need to have strong people skills, but as long as they do their job right, we think no one bats an eye to a person who cannot talk to people without looking them in the eyes.

What Does Their Boss Expect of a Capital Markets Analyst?

Their exact job requirements might vary depending on their employer, but usually, they are required to research the securities market and identify investment opportunities. Also, they are expected to be good at analyzing market trends and providing insights on potential investment opportunities. Of course, all of these would be in vain if these are not explained to the other people who will actually make these investments. That’s why these people need to be able to prepare understandable and coherent reports and presentations on findings.

Capital market analysts also need to assist clients with making investment decisions. It is understandable that not everyone has the same level of understanding, so as the finance gurus of their area, they need to help other people to make more informed decisions. Again, they take on the responsibility of monitoring portfolio performance and recommending changes and improvements.

What Does It Take to Be a Capital Markets Analyst?

If being a capital markets analyst is your cup of tea, there are certain skills and education that you need to have. Of course, having such big responsibilities, the stakes are high if you want to be the person who shapes the investment strategies of a company. But what are the skills that you need?

For starters, you need to have strong analytical and critical thinking skills that could help you find your way into this sea of data. Also, you need to have problem-solving skills that will come in handy when figuring out any obstacle or problem that you might face during your business life. Attention to detail is a must because, when dealing with such a competitive sector, the best decisions come from the smallest details that not an ordinary person cannot see. As it is a cut-throat business, time management and organizational skills are a must.

This precious information might be meaningless to other people if they do not share the same expertise with you. So, a high level of communication skills would carry your white-collar self to new heights. Interpersonal skills are also important in business life if you are aiming to be both successful and loved.

What About the Education?

Well, education is the key. That’s certain. Many positions require you to have at least a bachelor’s degree in economics, finance or accounting. You might be a “rain man” when it comes to finance, but most HR people require a diploma. Of course, if you want to get the best of this sector offers, it would be a great idea to get an MA or MBA. Having experience in the securities market and a strong knowledge of the factors that drive it is also highly appreciated in this industry. As we said before, if you cannot express your findings to other people, everything’s in vain. Thus, strong communication skills are vital.

“I Am Getting Paid, Like, Six Figures, Am I?”

Well, unfortunately, cash rules everything about us, so it is only natural that you might ask about the salary. According to Glassdoor, the average salary of a capital markets analyst is around $79,500. Most senior analysts can earn up to $130,000 annually. These salaries, of course, can vary depending on your experience, education level and location. For example, the people who work in New York earn more than other places.

A Typical Business Day for a Capital Markets Analyst:

Knowing what and when to do might be a great head-start for some newbie analysts. I asked some of my capital markets analyst friends to tell me what they do on a typical day as an analyst. Here’s a typical business day for a capital markets analyst:

Reviewing Market News and Trends:

The day starts with a hot cup of coffee while reading financial news to stay updated on the financial world. This also gives them an idea of what could affect markets. For example, a regional war could drive up the prices regarding that region, or a decision of the SEC can affect Wall Street. In today’s intermingled trade world, every development could affect the other side of the world, so it is a great idea to keep updated.

Analyzing Market Data:

After they are finished with their coffee and reading the news, analysts usually spend a considerable amount of time analyzing the market data such as stock prices, bond yields and economic indicators that might give them more reliable insights into the market state. They use these data to support or eliminate their thoughts on the market that came from the news and updates.

Conducting Research:

Our analyst then researches potential investment opportunities through these financial statements, industry trends and company news. This is where the difference between a good capital markets analyst and a bad one is understood.

Communicating With Clients:

If you cannot tell people where to invest and when to invest, all of those data and research are no different than a couple of numbers and letters. This is where good interpersonal and communicative skills come in handy. You need to provide market updates and investment strategies and answer every and any questions that your superiors or clients might have. Also, an analyst might collaborate with other analysts, managers and traders, as creating a successful investment strategy is usually a team job.

There You Have It…

Well, this is it – a day in the life of a capital markets analyst. The job might be daunting and complex if you are just a newcomer to this industry, but it is the nature of the finance world. On the other hand, it is a satisfying and gratifying business that makes the wheels of finance turn.