Ms. Davis
22 February 2018
Over the course of history, the stock market has constantly developed into the modern
investment industry seen today. Market crashes and recessions in the past have shaped the stock
market and economy and can provide valuable information to prevent them in the future.
Important factors to consider with stocks and bonds includes risk, liquidity, market fluctuations,
and interest. Jobs within the stock market range highly depend on the work of a stock and bond
analysts. A career as a stock and bond analyst requires a strong education, knowledge of
previous stock market crashes and market fluctuations, and the ability to differentiate risky and
safe investments.
An important factor involving a stock and bond analyst includes how they help
companies through their work. A stock and bond analyst works for a company to review
potential investment opportunities and analyze the amount of risk it has. This helps companies
decide whether they want to invest in the deals. Analysts have to consider the reliability of the
stock or bond, the quality of the investment, and the price. These factors ensure the company
gets the best use out of their money and invest in something worthwhile (Alm). An analyst does
this through thorough research of the deals before deciding whether or not to invest. A stock and
bond analyst needs to know and consider every aspect of the market (Alm). Reviewing deals
fully gives analysts more information about the investment to help them decide if loaning money
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seems worth it. Staying up to date on current events remains a highly important task for analyst
to maintain. One must stay aware of any possible news that can fluctuate the market (Alm).
Stocks and bond analysts must understand every element of the stock market to succeed in their
job.
An analyst needs to know the basics of stocks as it proves significant in the job. A stock,
or share, represents a partial ownership of a company that supplies it with more financial value.
A company sells its shares to the public as a way to raise money (Bhavish). These shares not
only help the company, but can give investors the opportunity to receive dividend yields, a
portion of the profits the company makes. When a company makes more profits, the value of its
stock increases and the potential for higher dividends. However, a substantial factor needs
consideration when investing in a stock: risk. Although stocks can result in investors making
positive returns, it can also leave investors with losses (Rosen). When the value of a company’s
stock decreases, the company and the investor lose money. When losing money in a stock
investment, companies must start making profits again in order for the investor to gain their
money back. The importance of analyzing the stock before investing in it contributes to the
The liquidity of a stock plays an important factor to consider as an analyst when investing
money into the market. Stocks have a high liquidity, meaning an investor can easily pull their
money out of a stock at any time (Chang). This allows investors the opportunity to quickly take
their money in and out of a stock when needed. The liquidity of stocks makes it safer to pull
money out of the market when prices start to drop (Chang). Keeping money in the market over
time proves safer than buying and selling frequently. Stocks, one of the many forms of
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investments opportunities, along with bonds, provide a unique resource to increase monetary
gain.
In addition to stocks, bonds plays an important role in the portfolio of many investors. A
bond represents a type of loan given to a company or government that gets paid back in full with
interest (Rosen). The longer a company uses an investor’s money, the more interest it owes. If a
company declares bankruptcy, the invested money gets paid back as much as possible to the
investor. Two main types of bonds exist: municipal and corporate. Municipal bonds, bonds from
the government, help to fund operations on a local or national scale (Gayer et al. 4). One can pay
off interest earned over time through tax exemptions, making this form of investment very
popular. Corporate bonds, bonds issued by corporations, help companies to expand industry and
grow as a whole. A bond’s liquidity depends on the bond, and often times has a lower liquidity
than stocks because the company needs time to earn back the money it borrowed in order to
repay the investor (Lee and Cho). The age and size of the bond determines how easily an
investor can earn back their money. The maturity of a bond determines when an investor can get
their money back, unless the bond trades in the open market. Interest rates directly correlate to
the expense of a bond (Lee and Cho). If interest rates fall, the price of bonds increases, and vice
versa. Once interest rates increase, the best time to purchase a bond becomes available to the
investor.
A stock and bond analyst needs to have knowledge of previous stock market crashes to
better understand market fluctuations. The stock market has had significant crashes in the past.
The spontaneous decrease in stock prices, known as a stock market crash, results in the loss of
invested money (Farmer). Factors contributing to market crashes include a weak economy, a
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catastrophic event, and/or public panic. The results of a crash can leave people unemployed and
in debt. After a market crash, the country goes through a recession, a decline in economic
productivity (Farmer). During this time, the country has to rebuild its economy and restore the
effects. Major stock market crashes have periodically occured in the past, devastating America’s
economy.
The Great Depression plays a major role in the United States stock market history and an
analyst must know the effects and how to combat such a crisis in the future. The Great
Depression exhibited a severe economic crisis causing millions of people to lose their jobs and
money. In October of 1929, the stock market crash caused massive effects all over the globe.
Investors sustained deep losses in the market causing unemployment rates to skyrocket and
salaries to cut in half (Farmer). Corporate bonds also had a high default rate. The intensity of the
crash lasted days, losing millions of dollars each day. On October 28, 1929 - known as Black
Thursday - the first wave of loss occurred when the United States market traded 13 million
shares. The following days lost even more money in the market, especially the following
Tuesday, trading 16 million shares (Farmer). Popular banks, such as J.P. Morgan had large
amounts of money invested in the stock market, losing clients hard earned savings. The revival
of the economy did not have an easy solution, however, war helped shorten the recovery period.
Although the Great Depression devastated America, World War II helped stabilize the economy
and restore the stock market. This knowledge provides a substantial understanding of how the
World War II ended the Great Depression by creating jobs, reducing government
spending, and increasing Gross Domestic Product (GDP). Military jobs increased family income
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and created more jobs in factories (Wandrei). Women started performing jobs men used to do
after they went to fight in the war, allowing industries to continue production. World War II
brought all government focus to war, leading to less money spent on other aspects. The war
became the most funded aspect in the United States for almost four years (Wandrei). GDP
increased during World War II because of the need for weapons, uniforms, and food. High
demand for goods presented itself in the effort to supply the country for war. The money saved
during war helped the growth of businesses and corporations, reviving the Stock Market after the
crash. World War II helped the economy get back on its feet and start thriving again.
Analysts require knowledge of a recession, because of the significant role it plays within
the markets. Understanding ressessions allows an analyst to know the impact on the markets and
how to combat them. The recession of 2008 resulted in a substantial decrease in the United
States economy and stock market. Real estate prices severely collapsed and in an effort to
address the problem in a timely manner, the government poured large amounts of money into the
real estate bond market to prevent public panic (Wandrei). Although this seemed like a plausible
fix, the massive flow of money into the market all at once caused interest rates to decrease. This
caused the prices of popular commodities, such as oil, to drastically decrease. After the
recession, stock prices plummeted and economic productivity slowed. Former President Barack
Obama passed a number of programs including the Economic Stabilization Act and
Reinvestment Act to prevent public panic and reduce the risk of future recessions (Wandrei).
These programs, along with the many others passed, made the market less risky and slowly
helped the economy grow again. In order to prep for possible changes in the market, analysts
needs to know of any new laws passed. Over the next several years, the United States would
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naturally restore its economy. Since the recession of 2008, America’s economy has seen
Current events have a great impact on the stock market that every analyst should know.
After the election of President Donald Trump in November of 2016, the stock market has
experienced significant growth. Presidential elections play a big role in affecting the market
when new policies form. Trump’s restrictive trade policy and fiscal policy caused stocks to soar.
This resulted in an increase in jobs, wages, and exports, and led congress to cut taxes (Petruno).
These factors not only benefit United States citizens, but positively impact almost all American
stocks, causing them to grow. Major stocks, such as Bank of America, have seen exponential
growth. In fact, “Profits rose by 14% in 2016, and analysts on average expect a 16% gain...,”
(Petruno). Stocks started increasing the day after Donald Trump’s election into office, and after
only three weeks, the Dow Jones Industrial Average (the average price of the 30 largest U.S.
companies’ stock traded on both the New York stock exchange and the NASDAQ) rose 800
points (Lim). Politics has a great influence in the stock market that every analyst should stay up
When investing in stocks, an analyst must remain aware of the potential risks. With the
chance to gain money, comes the chance to lose it. However, risky stocks tend to pay higher
returns in a short period of time while safer stocks have less growth (Rosen). Large company’s
stock have the security to protect the investor from large money losses, making it more safe with
less reward. Stocks without security have more volatility leaving the risk high, but the potential
reward greater. Bonds present a much safer investment choice over stocks because it almost
guarantees one’s money back with an added interest (Rosen). Despite their safety, the monetary
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gain of bonds, however, does not beat that of stocks over time. The decision to put money into
Studies have proven that age presents itself as a factor that directly contributes to where
an investor will most likely put their money. This applies to stock and bond analysts because
their age will change the way they view a potential investment opportunity. An older person
preparing for retirement proves more likely to put their money into safer investments, such as
bonds or steady stocks (Rosen). A retired person needs to protect their money without the risk of
losing it due to no longer having an income salary. This will provide the older person with a
steady increase rather than a potential decrease in money. A young person right out of college
has less money to risk, and proves more likely to invest in risky stocks for the potential of more
rewards (Rosen). A high reward has more intriguing aspects to a younger person than an older
person. A young person has their whole life to regain any money lost through the market while
an elderly person does not. This provides companies with better insight into what age group of
an analyst they would prefer to hire. Over time, age changes the way people choose to invest
Wall Street, the home of stock exchange, proves importance in the job of an analyst. The
New York Stock Exchange, a nationwide trading of stock, takes place on Wall Street in New
York City. Wall Street has acted as the main location of trading items for over four centuries
(Furgang 8). There, people traded animals, crops, and other goods which shaped Wall Street into
a modern stock trading street. Today, Wall Street has become the home of stock trading, the
buying and selling of stocks, and trades both national and international stock. The New York
Stock Exchange trades more stock than any other exchanging location (Furgang). Wall Street has
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many financial workers to trade stock and help the market grow. The trading that occurs in the
New York Stock Exchange greatly impacts the fluctuation of stock prices. Wall Street plays a
very important part in the stock market and requires stability for stock prices to remain
consistent, meaning if something happens on Wall Street, the whole market would show
consequences.
To become an analyst, one must have the minimum education requirement: a bachelor’s degree.
However, if one wanted to advance in job positions, a masters degree would prove helpful.
Majors that pair well in the stock and bond market include accounting, finance, economics, or a
marketing, and investments in college will provide a well rounded view of the market. The
stronger the education, the better one will do, not only in a job within the market, but investing
Business schools all over the country accommodate the majors needed to become a
market analyst. One should consider applying to universities with highly esteemed business
colleges. Duke University in Durham North Carolina has one of the best business programs in
North Carolina. Duke’s Fuqua School of Business offers opportunities for students to work
alongside companies and intern with people of their choice in career (“Duke University”). By
working closely with professors and collaborating with them on projects, students interested in
becoming a stock and bond analyst have opportunities others might not receive at smaller
schools. Duke accepts ten percent of its applicants, with an average SAT score of 1540 and ACT
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score of 33. Duke, along with many other schools, provides a great way to prepare students for
The University of South Carolina, another well known business college on the east coast,
has the Darla Moore School of Business: the largest business school near Charlotte, North
Carolina. The school has one of the best International business programs in South Carolina.
Although this University’s programs does not compare to Duke’s competitivity, it has programs
just as intricate. In fact, the college recently built a brand new business school, giving their
students a creative learning environment. The University has an acceptance rate of fifty-nine
percent and an average SAT score of 1270 and ACT score of 28 (“University of South Carolina
at”). University of South Carolina helps their students receive internship positions with
companies to help advance their knowledge in a hands on manner. Regardless of the college one
attends, hard work and networking can guide him or her to become a successful stock and bond
analyst.
An early experience in the stock and bond market can provide beneficial exposure for
future investment analysts. Some colleges allow students to invest real money into stocks or
bonds alongside their professors and the monetary gain goes to the school. Appalachian State
University’s Bowden Investment Group at Walker College gives students the opportunity to
invest while still attending the University (“Appalachian State University”). This provides a
great way for students to make networking contact with companies that they might consider
working for someday and gives them a head start on the work they will do in their future careers.
The Bowden Investment Group applies the written knowledge learned in class to the real work
force through this unique investment opportunity (“Appalachian State University”). Not only
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does the program teach students to safely invest their money, but it also gives them experience
that will help them in their future career as a analyst. Programs with investment opportunities
such as these provide students with familiarity to the stocks and bonds markets before they enter
employment.
The market provides a variety of careers that work alongside a stock and bond analyst. A
stockbroker buys and sells stocks for companies or clients to guide them through investments to
increase their monetary output (Cohen). Stock traders buys and sells stocks and bonds for a client
or company. Financial advisors guide people in what they should invest in based on their
financial situation and if they want risky or safe investments (Cohen). These different careers
pair well together for a company to lessen the chance of monetary loss and increase the chance
of gain.
Companies hire stock and bond analysts to review investment opportunities and decide
where they should invest their funds. Analysts play a big role in the company because whatever
they decide to invest in has the companies name on it which could not only leave them with a
hurt reputation if it invested in a faulty deal, but it could also lose huge amounts of money
(Cohen). Analysts must achieve the main goal of investing: to gain money. Banks, such as Wells
Fargo, have many stock and bond analysts from all around the country to help them endorse
different projects (Alm). Banks must make the right investment decisions because the money
invested comes from their clients who trust them to grow their funds. However, if the bank
invests in risky deals and loses money, people will likely put their money elsewhere. Banks and
other companies trust stock and bond analysts to recommend deals that deem safe in the public
Stock and bond analysts play a crucial role for banks and companies to invest their
money into something worthwhile. A strongly educated person with a passion for stocks and
bonds can become a successful analyst for a company big or small with hard work. Stock market
crashes, recessions, and fluctuations need recognition when dealing with investments.
Consideration of current events and the effect on prices within the market proves important when
investing in a deal. Stock and bond analysts will continue to play a huge role in the stock market
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