Wall Street Day: What Hedge Fund Analysts Do



    There is an opinion that in the field of finance, people work only for the sake of money, and there are really a lot of such people, but without love for their work, being an investment fund analyst will not work for a long time. Indifferent seek any way to high salaries and leave the office as early as possible.

    Compared to investment banks, work in a hedge fund is associated with less stress, you have to work less, days off almost always remain days off. According to analysts published on the Quora resource, despite the expected casualties, working in a hedge fund is more often more interesting and less influenced by corporate bureaucracy, employees get more freedom.

    We have already studied the conditions, in which financiers work, and now let's see how the working day of Wall Street analysts actually goes.

    The duties of an investment fund analyst always include:

    • Work in a team responsible for developing system trading strategies.
    • Strategy development for large teams with a mixed method of system and discretionary trading.
    • Assisting traders in testing trading ideas that will be further used in strategies with their understanding of the market.
    • Helping traders build strategies.

    Former hedge fund manager Vladimir Novakovsky shares his experiences with analysts at Quora.

    Each case is characterized by different levels of stress and, accordingly, salary. A lot of time is spent on programming. You should not rely only on engineers from the development team. In small teams there is always not enough time. Compared to large banks or institutions, one gets the feeling that it will not be possible to analyze all possible areas on time.

    In hedge funds, analysts or quants are respected. Companies generate large profits based on their ideas, or at least understand that they can make money with their help, so they are serious about the work of these employees.



    It is very interesting to see how your ideas work in the markets. To a greater extent, time is spent on data and conducting empirical studies, less often on theoretical models.

    Sometimes you have to do not very interesting things, for example, to create tables in Excel. But, compared with investment banks, funds have less bureaucracy and shorter working hours.

    Based on Quora surveys and descriptions from experienced professionals, you can make an approximate version of the fund analyst’s working day.

    Working day


    Morning

    Wake up and immediately read on the Internet the latest news on the New York Times, Wall Street Journal, Financial Times and CNBC, see information from analysts. Scroll through a hundred letters in the mail, pay attention to messages from investment banks. There’s never enough time for everything - the rest is to finish reading already at work. Depending on the location of the office, someone does a morning run, and someone has to go to work right away to catch time through traffic jams.

    At the office, the day begins with the inclusion of Bloomberg terminals and a quick breakfast. To begin with, the analyst quickly checks everything that caught his attention while checking the news at home. Next, you need to read several analytical reports and many more articles from the news feed, Google News, Bloomberg and Facebook.

    Sometimes it is useful to discuss the news with your colleagues, and then pay close attention to price movements when trading opens on the market, especially sharp jumps occur at the very beginning of trading. After the day opens, time appears on the markets to read through the remaining mail, have breakfast, view several reports and search for useful information on the network.



    Further, the analyst most often conducts a qualitative analysis of various indicators, IPO forecasts, quarterly reports, watches presentations, interviews with company directors, press releases, reports, JP Morgan or Bank of America. The analyst’s tasks include evaluating what is happening on the market, looking for oddities and illogical scenarios that can lead to a good opportunity to make money.

    When the qualitative analysis is completed, the specialist proceeds to a quantitative assessment - the construction or updating of models. At this stage, you need to determine the main indicators of growth and add your own assumptions, supported by facts. You need to check everything very carefully to ensure safety with a margin for potential transactions. The analyst has many tools at his disposal, for example, to discount or simulate the distribution of assets.

    After the analysis, you need to clarify the resulting figures and investment calculations, call colleagues from an investment bank, an expert or a friend in the industry. There is no room for errors; everything should either converge for sure or not.

    Until the middle of the day, the hedge fund employee remains to fulfill the plan. If important stocks begin to noticeably change in price, then you need to closely monitor them. It is also worth contacting the manager and find out what else you need to work on, ask for opinions on the analysis that has just been done. In the remaining time, you have to read a lot and continue to analyze: open data and queries, transcripts of records, presentations, data analysis, forecasts.

    Good ideas can come precisely in the process of reading, and not constant monitoring of quotes. Depending on the load and responsibilities, the analyst can build many mathematical models or give them to someone of a lower rank and focus on wider things. It is very useful to take small breaks every hour to stay focused throughout the day and not to make mistakes in calculations.

    Noon

    At noon again, stock monitoring, with a lunch break. After the meal, the analyst expects a new wave of news about the market, sometimes meetings, and many more texts - reports and documents on the industry. It is important to check how competitors are doing, read their sites and reports.

    Finally, towards evening, there is an opportunity to go to the gym, get physical activity for an hour and a half and take a break from finances. After the gym, work does not end - new data, data collection, reports, project evaluations with other analysts, meetings and other similar things. There are meetings with colleagues from other organizations and banks, during communication you can get valuable information, the main thing is not to reveal any secret of your company, but otherwise the exchange of rumors is useful.



    Evening

    The analyst’s working day ends at approximately 19: 00-20: 00, someone continues to work at home, but if a person has a family and he wants to maintain his emotional state, then he tries to maintain a balance between life and work, to prioritize correctly .
    The remaining time is spent for dinner, chatting with family and friends, sometimes for reading or entertainment. In rare cases, instead of watching a series and reading a good book, you have to analyze new reports and watch interviews with company executives to be prepared for what can happen the next day. Someone even manages to find time for their hobby and develop not only on weekends.

    You have to go to bed quite early - the morning of the hedge fund employee starts at about 5:00. Reading bedtime is harmful, but not everyone can resist. The next day, everything repeats.

    In some firms, employee behavior is rather loyal, more often it is large organizations where long-term relationships and work for results are valued than unscrupulous employees can use. There are other companies where you are turned into “slaves” for the sake of a common cause, such organizations are not suitable for everyone, but there are people who like this atmosphere.

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