21st November 14
I’d like to start off by saying that the Young Investment Banking Programme really helped me enhance my decision making skills, and helped me realise that through team-work and constant scrutiny of economic and political events, you can make wise investment decisions which can help you and your client achieve enormous profits even in such a time of economic turmoil, where the financial wilderness is filled with bulls and bears, that is, the bear and the bull market. The Young Investment Programme helped me to understand if Investment Banking is the right sector for me, and as it turns out, it actually is.
We first started on with learning about the role of an analyst in an Investment Bank, and realised that it is one of the most crucial and stressful positions you will ever come across. It involves countless hours of research, determination and a knack for numbers, and specialisation in the creation of charts and constant speculation of future movements and trends in the market, and a little of overtime work in the weekends, which of course, most of us wouldn’t want. So what is the incentive to become an analyst? What drives them to go through such extreme stress? What motivates them? The answer is well, money. Money is the main driving force in Investment Banks, as the more analysing Analysts do, and if their analysis turns out to be correct, they are highly rewarded, with vast bonuses of course. Getting a job as an analyst in Investment Banks is quite vigorous due to intense competition; 50 people can apply for the same position in an Investment Bank, and you need to hope that you’re not the one who gets shortlisted along with the other 48 people who applied for the position. We also learned about the different kind of “sectors” in Investment Banks, that is, the front and the back office.
The back office involves a team of highly-skilled analysts who are the driving force of the firm; you can call them fuel and engine of a car. They use their expertise to analyse the market and come out with speculations, and are also responsible for combining financial products and creating complex financial derivatives, and then pass on this to the front office, that is, the brokers/traders. They then sell these complex financial products to their clients, and also advise on sound investment strategies which will both benefit the client and the firm, but not always. This is why Analysts have a key role, as they heavily scrutinise the market and speculate market movements. Analysts usually rely on technical analysis, while broker/traders usually rely on fundamental analysis.
Then we were given case studies with real up-to-date economic events, and were told to analyse, speculate and advise on sound investments, along with our team-members. This really helped us on our decision making skills as with team-work comes strong backing of sound investment plans. We were put in random groups with unknown people, and this also helped us in creating business relations with unknown people and create a strong, business-friendly environment which was probably the most important factor of this programme, as I realised, if you surround yourself with people that have the same interests as you (in this case Investment Banking), you can come out with very sound conclusions which can benefit you and your team.
After that, we learned about the role of Brokers/Traders in Investment Banks. This seemed very glamorous as movies like “Wall Street” and “The Wolf of Wall Street” portray the life of a broker/trader in a very positive manner, as they usually receive very high financial rewards and can afford to buy expensive, flashy sports cars. Would I call it glamourous? Yes and no, as this is probably the most competitive job environment in the entire investment banking industry. Traders/Brokers are required to find countless number of clients, dial numbers over 600-1000 times a day, and convince clients to use their financial services. As you see, this can be quite stressful, but the stress is worth the financial reward received during these jobs. We learned about the different kind of investors, Institutional investors and Retail investors. Both of them have a very important role towards generating profits for an Investment Bank, yet financial services to the both of them vary very much.
During the end of the programme, we learned about the subjects and degrees required to get into Investment Banking, and also learned about the interview process and construction of C.V’s for job applications. The people who introduced us to Investment Banking were professional bankers from the industry, and were well qualified people with success stories.
I believe this programme was a crucial part of my life towards success, and recommend it to anyone who wants a glimpse of what Investment Banking is all about!
DLD College London Student