Research analyst reading the day's financial news on a laptop computer - Kaplan Schweser

Posted by: Kaplan Schweser
Date: July 25, 2017

Research analyst is a fairly vague term that is used in a variety of fields. In the financial investment industry, a research analyst is sometimes more specifically referred to as an equity research analyst. Equity research analysts serve as investigators who analyze data, such as financial information, performance trends, economic trends and news, political climate, industry changes, and specific business developments. They synthesize their analysis of that data into a research report. That report is used to inform and advise traders and institutional investors on whether to buy, sell, or hold specific stocks.

Balancing Analysis with Creativity

While research analysts must possess a strong analytic and financial skill set, the most effective research analysts understand that the trait that will set them apart from their peers is the ability to creatively extrapolate recommendations from the data they analyze. The ability to blend the data together, see what’s not visible to the untrained eye, form an educated opinion, and clearly articulate it, is as valuable to research analysts as their analytical skills.

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The Value of a Global Perspective

Because a research analyst is required to, in essence, predict the future performance of a given company’s stocks, the analyst needs to understand how countries, economies, industries, businesses, and individuals are most likely to react to projected scenarios. For that reason, research analysts need to be well informed on current events, as well as historical events as they relate to business. In order to achieve this knowledge, research analysts must do a lot of studying and reading. They read books on investment, international geopolitics, mergers and acquisitions, and economics. They also read the news. They analyze how particular markets or governments react to particular events. They develop an understanding of how certain events trigger other events, and how these triggers differ from country to country and industry to industry.

Developing a strong global perspective through the analysis and understanding of past and current events allows a research analyst to more accurately predict reactions to predicted or possible changes. This gives the analyst a historical framework for providing recommendations based on sound evidence.

Accountability and Responsibility are Critical

Research analysts are valued for their opinions. Those opinions are formed based on detailed analysis, historical trends, and a variety of other factors. Even though they are well-informed opinions, they are still opinions, so it’s important that research analysts be accountable for them. Even the best research analysts aren’t right 100% of the time. But a great analyst will understand the value that comes from making and owning a mistake—and they will dedicate themselves to finding out why they were wrong. While it can be said for all professions, a good research analyst becomes better at the job when they are willing to own and learn from their mistakes.


Research analysts play a critical role for their firms and clients, helping to ensure no stone is left unturned before making an investment decision. They are compensated well for their work, because the role they play can make an enormous difference in the success or failure of the high-value investments on which they advise.