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CFA – Higher Qualification for Investment Analysts

by financialcorri

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CFA (Chartered Financial Analyst) your Passport to make Investment Analyst. Achieving your CFA (Chartered Financial Analyst) charter can place you among the elite in the investment Analysis profession. It's the most respected and valued credential in the global finance community - and your passport to advancement within the investment analysis profession. The most appropriately held positions among CFA charter-holders are analysts and portfolio managers, though many serve as senior managers, strategists, financial analysts and advisors. The corporate, institutions, investment firms that hire CFAs know that the charter signifies not only subject area competence, but also a dedication to knowledge, professional expertise, and high ethical standards!

Cfa are extremely valuable to the businesses that retain them as they master many areas of expertise:

Corporate finance- corporate governance, dividend policy, capital investment decisions, mergers and acquisitions and corporate restructuring

Equity investments- types of equity securities, equity markets, fundamental analysis, and equity market valuation and return analysis

Fixed income- types of fixed-income securities, fixed-income markets, fixed-income valuation, and analysis of interest rate risk and credit risk

Derivatives- forward markets and instruments, futures markets and instruments, options markets and instruments, and swaps markets and instruments

Alternative investments- real estate, private equity/venture capital, hedge funds, and commodities

Portfolio management and wealth planning- management of individual/family investor portfolios and of institutional investor portfolios, pension plans and employee benefit funds, mutual funds, pooled funds, exchange traded funds (ETFs), and portfolio construction and revision

Quantitative methodology- time value of money, correlation analysis and technical analysis

Economics- market forces of supply and demand, business cycles, the monetary system, currency exchange rates, and effects of government regulation

Financial reporting and analysis- International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP), plus analysis of inventory, long-lived assets, taxes, debt, business combinations, and global operations.

There are two major classifications for financial analysts: buy side analysts, who develop investment-buying strategies, and sell side analysts, who work with securities dealers that sell stocks, bonds, and other investments.

Buy side analysts work for companies with large amounts money to invest. These institutional investors include mutual funds, hedge funds, insurance companies, trusts, pension funds, independent money managers, and nonprofit organizations with large endowments. Buy side analysts research investments to determine their potential and how well they fit into the company's investment strategy, and then make recommendations to accordingly to the company's money managers. These recommendations are usually kept between analysts and company management and financial officers. This is particularly true of mutual fund and hedge fund investment management companies, as it keeps competitors from having access to the same advice while the investment company attempts to outperform its competitors and attract more customers.

Sell side analysts work for brokerages or other firms that manage individual investment accounts. These analysts issue broad blanket recommendations to the clients of the firm, such as "buy," "neutral," or "sell." Analysts want these recommendations to influence the buying decisions of the firm's clients and, potentially, attract new clients by consistently producing accurate recommendations. Sell side analysts are often called equity research analysts.
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