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Phase 1: Identify the right career for you

Identify which career will allow you to maximize your long-term potential

In this section, we're going to cover the first phase of our three-phase framework to landing your dream job: identifying the right career for you.

Let us start by asking you a few questions: 

  • Do you know how traders really make money? 
  • Do you know that equity research and credit research roles are actually pretty similar?
  • Do you know that you actually don't need to be a maths genius to work as a quant?
  • Do you know that working in fixed-income is the opposite of boring?
  • Do you know what portfolio managers spend most of their day doing?

If you answered "not really" or "sort of" to any of these questions, then you might really benefit from learning more about the different careers available to you. 

Too many students jump head-first into the application process without really knowing what the role they're applying to really entails. Many regret it dearly later because it's not so easy to switch careers once you started. 

So the first step to figuring out what you want to do is answering the following question.


Step 1: What are you passionate about?

Many individuals who want to break into finance have only a limited understanding of the finance industry. Many think th working in finance = working at an investment bank. Or perhaps they confuse working in IBD (investment banking department) with working in S&T (sales & trading). In reality, the work in IBD and S&T are completely different. 

To help you avoid those mistakes, we've categorised different finance careers into three broad groups: markets-focused careers, corporates-focused careers, and startups-focused careers.

 

A) Markets-focused careers

 

B) Corporates-focused careers

 

C) Startups-focused careers

 

Here’s an illustration that shows these three main categories and the finance areas under each. We’ve also classified all the finance areas (except for fintech) as either buy-side or sell-side. Don't worry, we're going to explain all of these terms in a minute.

 

From the illustration above you probably noticed that at InvestInU Academy, we mainly focus on careers in markets such as sales & trading and investment management. Why? First, because we've been having successful careers in the field. Second, because we're passionate about markets and believe the most interesting opportunities right now are in markets-focused careers.

Markets-focused Careers = Sales & Trading, Investment Management & Hedge-Funds

So you decided to explore markets-focused careers? Congratulations you're definitely in the right place so read on!

While all markets-focused careers have financial markets in common, your day-to-day job will be quite different depending on which area (buy-side vs. sell-side), role, and asset-class you work in. These three dimensions are what define a specific markets-focused career.

For example, you can be a buy-side equity analyst. Or a sell-side fixed income trader. Or a buy-side multi-asset quant. And so on. Each of these jobs is very different. Even trading on the buy-side requires a different skill set than trading on the sell-side.

So to help you identify the right markets-focused career for you, we've simplified the process into 3 more steps.


Step 2: Do you want to join the buy-side or sell-side?

Buy-side? Sell-side? What's the difference?. These two terms are thrown around quite a lot in the finance industry. All the finance areas mentioned above (except for fintech) can be classified as either buy-side or a sell-side.

At a very high-level, the buy-side are the ones taking investment decisions – that is, they’re the ones buying various financial instruments such as stocks, bonds, and, in private equity’s case, entire companies. Which finance areas are on the buy-side? All the ones investing client money: investment management and private equity.

The sell-side helps various institutions (such as investment firms, corporates, governments, and so on) take and implement investment decisions, raise financing, and execute other corporate transactions. 

The sell-side does this by selling various services. They sell advisory services to corporations looking to raise capital by issuing new financial securities (stocks and bonds). They then help sell those securities to firms on the buy-side such as investment firms. They also sell other services to these investment firms such as research, trading, structuring, and so on.

Which finance areas are on the sell-side? Investment banking and sales & trading.

Now, at this stage, the assumption is that you're interested in a markets-focused career. So the decision to join the buy-side or sell-side is basically a decision on whether you want to work in investment management or sales & trading.

Most of the roles we're going to discuss below can be found in both areas. That is, you'll find analysts, traders, and quants at both investment firms and sales & trading departments. The day-to-day job of both analysts and quants is quite similar in investment management and sales & trading. The main difference is that in investment management, analysts and quants support their internal investment team whereas in sales & trading, they support external clients. 

The trading role is somewhat different. We'll touch on this in step 3 but at a high level, most traders in investment management tend to focus more on execution (i.e. they execute their portfolio managers' trades) whereas traders in sales & trading have other functions such as market making, pricing, and prop trading . Obviously, if you work for a prop trading shop or a hedge-fund on the buy-side, things may be different but we'll get into the details later.

Finally, certain roles are area-specific. If you want to become a portfolio manager and invest client money, then you can only do that by working in investment management. And although you have sales roles in both areas, if you want to be pitching trade ideas to clients, then you can only really do that in sales & trading.

The bottom line: If you want more of a client-facing role, then sales & trading is a better fit for you. Your work will be driven by client flows and you'll work in a fast-paced environment. If you want to be directly involved in investment decisions yourself, then investment management is a better fit for you (or trading on the sell-side). Investment management is all about investment performance. 


Step 3: Which role do you want to work in?

This is perhaps the most important decision you’ll have to make before pursuing a markets-focused career. Do you want to be a research analyst? A trader? A quant? We briefly touched on these in the previous step but to really be able to make that decision, you first must have a solid understanding of all these different roles, what skills are required for each, what are the pros and cons of each, and more. 

A) Overview of investment management roles

There are four key roles in investment management:

 

B) Overview of sales & trading roles

There are four key roles in sales & trading:

 

C) Which role is right for you?

By now you should have a better understanding of the different roles and an initial idea of which ones you prefer. The decision also comes down to your interests and what kind of environments you thrive in. To better illustrate that and help you decide which role is right for you, we made the table below for you – so be sure to check it out.

Step 4: Which asset class do you want to work in?

Just like how doctors specialise in a particular branch of medicine, it’s very common for someone working in a markets-focused career to specialise in a particular asset class.

What’s an asset class? A group of financial instruments which have similar characteristics and behave somewhat similarly. For example, stocks are considered their own asset class, often called equities. Bonds are another example, often called fixed income. And so on. We’ll explain all these in a minute.

Back to our specialisation discussion, if you’re working in a markets-focused role, you’ll most likely specialise in a particular asset class. For example, you could be an equities analyst, researching and investing in stocks. Or you could be a fixed income trader, making markets in and trading bonds.

Nore here that our discussion of asset classes is all focused on publicly-traded markets. That is, we’re not covering private markets such as private equity, real estate, infrastructure, and so on.

When it comes to publicly-traded markets there are four main asset classes: equities (i.e. stocks), fixed income (i.e. bonds and loans), commodities (physical, basic goods), and FX (foreign exchange i.e. currencies). Fixed income can be further split into two main sub-asset classes: credit (bonds issued by corporations) and rates (bonds issued by governments). Finally, taking a building-blocks approach that invests across all asset classes creates a separate, unique asset class called multi-asset.

A) What's it like to work in each asset class?

When working in a markets-focused career, the nature of the work varies by asset class. For example, working in equities involves spending more time analysing individual companies. Working in fixed income rates however, involves spending more time analysing macroeconomic variables. And since micro vs. macro analysis are almost polar opposites, working in equities vs. fixed income rates is very, very different.

Below you’ll find summaries of what you'll generally be doing in each of the six main asset classes we touched on. Note that sometimes the work will also vary by role or investment style.

 

B) Which asset class is right for me?

While we made the table below to help guide you through that decision, it ultimately comes down to which corner of the financial market you're most interested in. If you love the stock market, then you probably want to work in equities. If you like macroeconomics and the mathematics behind bond pricing, then you probably want to work in fixed income rates. And so on.

How To Land A Job In Equities?

In this course, you'll learn:

☑️What it’s like to work as an analyst, a trader, a quant, or a sales

☑️How to prepare for equity research, equity quant and equity derivatives interviews

☑️How to structure and present a stock pitch to ace equity research and equity sales interviews

☑️Inside tips from top professionals working at hedge-funds, banks and asset managers

 

The Complete Guide to Investment Careers in Equities

£97.00 GBP

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