All you need to know about choosing stock markets as career
The stock markets have come a long way over the past two decades. During this journey, there has been considerable turbulence caused by the events occurring globally. To name a few, the Asian financial crisis in late 1990s, the Dot Com bubble in 2000, the Global Financial Crisis in 2008, the European Debt Crisis in 2011, and the Chinese slowdown since the last few years.
Despite these major waves of turbulence, the stock markets have stood the test of time and are not far off from their historic highs, as is the case in India.
During the initial few years of the Indian markets, participation was limited and the number of companies offering services related to investments in the stock market were few and consolidated at the hands of a few brokers. However, things have gradually opened in India. Since the Global Financial Crisis of 2008, the stock markets in India have
expanded rapidly. Besides the traditional way of buying stocks in the cash market, a lot of instruments are now available for trading and investing in the stock markets. For instance, the derivative instruments on stocks and indices have risen rapidly over the last few years, opening door for various participants such as hedgers and speculators. The mutual fund industry in India has witnessed a spectacular growth, with Assets Under Management
(AUM) increasing by more than 5 times in just over a decade. Other products such as Exchange-Traded Funds (ETFs), tax savings funds etc. have also attracted a lot of interest among market participants.
Such a spectacular growth in the stock market has been made possible not only by people who participate in the market, but also by people who have facilitated the availability of such instruments as well as by people who provide their expertise for trading and investing in such instruments. The avenue for making a career in the stock market is immense. India is becoming a major player in the global economy and is also the fastest growing emerging market in the world.
Currently, in terms of GDP, which stands for Gross Domestic Product and measures the aggregate value of all goods and services produced in the country during a certain period, India ranks seventh in the world. Our government aims to make India a $5 trillion economy by 2024, which would represent a growth that is nearly twice that of the current level.
Meanwhile, data shows that less than 3% of India’s population invests money in the stock markets. With technology increasing at a rapid pace and the cost of acquiring this technology reducing because of immense competition, there is a potential for tremendous growth in this sector.
As stock market is one of the key barometers that represent the health of any economy, the growth story of India coupled with the current low rate of penetration in the stock market suggest sthat there will be increased demand for professionals in this sector. For people who are interested in making a career in the stock markets, the opportunities are plentiful. For instance, one could work with a buy-side firm such as a mutual fund, hedge fund, pension fund etc., or with a sell-side firm such as a broker, an advisory firm, an investment bank etc. Apart from the diversity of companies that employ people willing to work in the stock market, the positions for which these companies hire is also just as diverse. For instance, companies hire for the position of a Fundamental Analyst, Technical Analyst, Risk Analyst, Derivatives Analyst, Investment Banker, Mutual Fund Manager, Hedge Fund Manager, Wealth Manager, Economist, Financial Planner, Trader, Dealer, Systems Developer etc. The list simply goes on, such is the diversity of working in the stock market.
Given the diversity of companies that hire candidates for a range of positions and functions, making a career in stock market can be highly rewarding and challenging. The rapid pace of technological advancement, greater transparency, and global economic progress will only increase the importance of stock markets in the coming decades. Hence, demand for the workforce willing to make a career in the stock markets will only shoot up.
That said, working in the stock market requires specialized skills and qualifications. A person willing to make a career in the stock market should have strong analytical skill, should be disciplined, should be regularly updated about developments taking place globally, should have decision-taking ability and confidence, and should have a great deal of patience.
On the education front, there are a lot of finance-related courses that one could pursue to make a career in the stock market. The internationally recognized ones the Chartered Financial Analyst (CFA) program, the Financial Risk Manager (FRM) program, the Chartered Market Technician (CMT) program, the Chartered Alternative Investment Analyst (CAIA) program, the Certified Financial Planner (CFP) program, Master of Finance, Master of Business Administration with specialization in Finance, etc. Pursuing one or more of these courses opens the door for entering the highly competitive world of stock markets.
Besides these courses, there are a lot of short-term courses that are available in India, such as the ones conducted by the NSE and the BSE. NISM certifications are considered to be the standard in the field of trading and investments. They are recognized by the exchange and many of them are mandatory for market participants.
Commerce degrees such as B.COM, BBA/BBM, MBA, PGDF, PGDM etc. have little to no emphasis on stock markets, trading or investing as a subject. These courses are considered to be a standard and many undergraduates go on to pursue MBA hoping for a value-add in terms of their employability but in real terms, it adds little to no value in terms of the knowledge offered. However, there are a handful of institutes which are good.
However, there is a tendency among most aspirants to complete as many degrees as possible to become more employable. Beyond a point, degrees and certificates don’t matter. Hence, it’s best not to focus too much on the theory aspect of finance but rather the practicality which can only be earned with years of experience.
In a nutshell, a career in stock market is highly rewarding and challenging. With India aiming to become a $5 trillion economy in the coming years and with the current rate of participation being quite low, the potential for making a successful career in stock market is quite high. With right qualifications and a strong skill set, candidates can make a long and successful career in the diverse world of stock markets.
(Author Tejas Khoday is Co-Founder and CEO, FYERS. Views expressed here are personal.)
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