Financial Analysis is Not a Game of Numbers

Most of the students who are studying up to be analysts just think that it is a game of numbers, and you to play around them. In practice, numbers are used in financial analysis to actually support our ideas. Financial analysis is all about understanding how the economy works and the dynamics of different sectors. If you know only these two things, you are able to pick the outperforming sectors without any problems. After that you just need to employ numbers to prove your points.

Every financial analyst actually knows that his forecasts can easily deviate, so once you become an analyst, you subconsciously start focusing on the dynamics of a sector rather than wasting much time on number crunching. Once you know the dynamics, the business model, government regulations and sector dynamics of a company, you are totally prepared to conduct the analysis on that.

Only because of this reason, most of the financial analysts hired in the United States have 4-5 years of experience (mostly engineering or marketing) of the relevant industry before they are hired by a brokerage house.

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