Getting into investment is one of the most exciting career paths there is – and one of the most challenging. It takes an analytical mindset and an attention to detail but also real drive and ambition. Although in any career there are some people who get a leg-up, to achieve success in investment depends on talent and hard work.
Careers in investment
There are a number of different career paths within the broader investment industry, but for people who want to focus on trading in financial assets, the three main options are going into investment banking, asset management or working with hedge funds. This means getting a good degree in finance, business, economics or (occasionally) mathematics, then aiming to move into a junior role in operations and climb the corporate ladder. Starting in analysis can ultimately open the door to a role as a manager or consultant engaged in portfolio management.
Although starting salaries can be lower in operations roles than in related professions, the work quickly diversifies and becomes more interesting, and senior positions can pay very well indeed. Starting out with a specialty in mind can increase the chances of getting ahead quickly.
Why choose the financial sector?
Facilitating the movement of money across all other sectors, financial services are right at the heart of the economy. Specialising in this sector gives investors and investment managers a fascinating viewpoint on what’s happening across the economy as a whole. Though outsiders often see the sector as confusing, and there’s certainly a lot to learn, there’s no reason why a diligent and hard working person can’t learn to navigate it, and there are lots of other people willing to pay good money for the use of those skills.
Specialising in financials requires paying attention to the surrounding political and regulatory environment in order to anticipate changes. Because the processes involved are complex and subject to change, it provides more opportunity than most areas of investment for dynamic thinking and innovative strategizing. Working in this area never feels routine.
Changes in the sector
After the crash of 2008 a lot of people became very wary about investing in this sector because financial services companies were particularly badly hit. As always, though, when other investors’ move away, stock gets cheaper and fresh opportunities arose for those prepared to take the risk. Things began to look up in 2011 and there was a brief flurry of investment as a result, but this died down when profits didn’t reach the levels predicted. Had the investors been mistaken?
There are two ways of looking at investment success. On the one hand, most of these 2011 investors didn’t actually lose anything even if they withdrew their money just a few months later, so that doesn’t seem so bad. On the other hand, they could be seen as having missed opportunities to make money by placing their capital elsewhere. In that sense they lost, but it doesn’t mean the sector is a bad bet. The reason they didn’t get what they were hoping for is that financial companies didn’t undergo rapid expansion to fill up, once again, the space they had left after the crash. Instead, they grew steadily. While this may not be as exciting – and doesn’t produce much high dividends – it is a sign of growing business stability, and it decreases worries about the risk of another crash on the same scale.
For this reason, the financial markets are now looking quite tempting to investors. They’ve grown steadily over the past two years, and further reassurance comes from the fact that most of the anticipated regulatory changes are now in place, so their impact can be assessed. This means there are good opportunities for those who may not be looking to make a quick buck but who want to see their money make healthy gains over time.
Pursuing an investment career
To stand a good chance of getting into investment requires not only a good degree but also good experience. Unlike most areas of work, this is a context in which one can get experience without the need for an employer, by investing directly – even relatively small amounts – and proving that one can make that money grow. Better still is to get a banking internship, and it’s worth looking out for financial analysis training programs within related industries (such as auditing), which can act as a back door into investing.
Developing an investment specialty can lead to an exciting career with great personal and financial rewards, so for those with the right talents who love a challenge, it’s well worth pursuing.