What is Equity Research? What qualifications and skills are required to become Equity Research?
Let’s find out, some basic information about What is equity research, who do they work for, how they make money.
Equity research is a profession, where researchers can give Buy and Sell recommendations on stock or equity, based on their proper research. The bases of research could be fundamental analysis, technical analysis, or any other way.
Who they give a recommendation, there is two side’s, through them they can give recommendation:
1. Sell-side: They can give recommendations to their client through a large investment firm, on which securities or equity they can buy and sell. It includes:
· Investment Bank
· Brokerage houses
2. Buy-side: In buy-side analyst and equity research associate is working with the company which has already have lots of funds to invest. Buy-side includes:
· Mutual fund
· Hedge fund
· Pension fund
· HNI
This kind of company, which already have fund they are ready to invest in security, at the recommendation of equity researchers.
How do they make money?
Every equity researcher has a particularly fixed salary through which they get paid, and get extra money, By generating commission on sales/purchase of securities via their broking arm.
What qualification and skill is required to become Equity Research?
The first and the FOMO thing, I need to remind you here is, it is not a degree base job, you having a qualifying is a good enough thing, but we can’t survive over a long period just based on your degree.
So, you need to have a very keen interest in the financial market. This is the primary skill required:
· Financial statement analysis
· Good understanding of macroeconomics
· Financial modeling
· Valuation
· Report writing
· Communication
Now, what are educational qualification required which helps you to land a job in equity research:
· Graduation (any graduation degree)
· CFA
· MBA in finance
· NISM certificate
So, I hope that after reading this article, you get some basic information about what is equity research, the qualification, skill requirements to become an equity research analyst.