How Do I Become an Investment Research Analyst

First, you need a finance degree—economics or accounting will also work—to get your foot in the door as an investment research analyst. Around 70% of analysts come from this background. Also, to become more competitive, one should earn a CFA certification since approximately 30% of analysts hold this licensing, which usually requires 3-4 years and a significant time investment. Internships are important as well, with more than 80% of analysts having at least one—nearly always lasting three to six months. Additionally, knowledge of tools like Excel is mandatory, as 90% of analysts use Excel to model financials. A basic understanding of Python is also recommended, as over 40% of analysts are familiar with it. Having Python skills is an advantage, and ongoing learning of emerging technologies is essential.

Obtaining the Right Educational Background

First and foremost, you will need a degree in finance or accounting. Industry reports show that over 70% of analysts have degrees in finance, economics, accounting, or business administration. Almost half (45%) have majored in finance, which is the most common major among them. Aside from skills in quantitative analysis software, earning the Chartered Financial Analyst (CFA) credential could drastically increase career opportunities, as more than 30% of professionals hold a CFA certificate.

The average time to complete the CFA certification is 3+ years, with pass rates roughly as follows: around 43% for Level I, 47% for Level II, and up to 56% for Level III. The CFA is a highly recognized certification in the U.S. market, and those holding it can command at least 20-30% more salary than non-certified professionals.

Building Strong Analytical Skills

Analytical skills are at the core of what an investment research analyst does. Analysts spend their days analyzing financials, coming up with earnings estimates for firms, and betting on directional moves in market prices. Over 90% of investment analysts rely on Excel for financial modeling, and nearly 40% can code in languages like Python, used for advanced data analytics or automating financial reports.

Bloomberg terminals, FactSet, Morningstar Direct, and other tools are common within the industry. Investment research analysts typically spend 4-5 hours a day using these software platforms and data tools while analyzing 50-100 pages of financial documents and reports.

Gaining Practical Experience Through Internships

To get into the investment research field, practical experience plays a crucial role. More than 80% of investment research analysts complete at least one internship before getting a full-time offer. Typically, internships last 3-6 months and involve analyzing financial data, assisting with report writing, and learning from senior analysts. Roughly 50% of internships turn into full-time job offers, particularly in investment banking (where 40% of analysts start), private equity (30%), and asset management firms.

Internships at major firms like Goldman Sachs, JPMorgan, or Morgan Stanley will give you a strong advantage in getting hired. Analysts who intern at an investment bank after their junior year in college often start with higher salaries, averaging between $60K and $90K, depending on the firm and location.

Enhancing Communication and Reporting Skills

One key duty of an investment research analyst is preparing detailed and clear investment reports. Analysts write 5-10 investment reports a month, each ranging from 20 to 30 pages. These reports simplify complicated financial information into actionable advice for investors.

Beyond written reports, communication skills are essential. Analysts often present their findings to internal teams, senior management, and clients. Typically, analysts are on 2-3 investor calls or internal presentations per week. Strong oral communication skills are necessary to explain complex financial concepts in a simple way.

Staying Updated with Market Trends

Investment research analysts must constantly follow financial markets, economic indicators, and industry trends. Data shows that over 60% of analysts spend at least 2-3 hours a day reading financial news, market reports, and industry updates. Common sources include The Wall Street Journal, Financial Times, and Bloomberg.

Analysts usually update their market or sector forecasts quarterly. Being aware of current market trends is essential for making sound investment decisions and providing timely recommendations.

Pursuing Professional Certifications

Other certifications, such as Financial Risk Manager (FRM) or Certified Public Accountant (CPA), provide additional value, particularly for those interested in risk management or corporate finance.

The CFA certification is especially common in the U.S. because it covers investment management, financial analysis, and ethical standards. Data shows that CFA holders in the U.S. earn an average annual base salary of $125K, excluding bonuses, and make 20-30% more than non-certified peers.