Appreciate the understanding of the previous macroeconomic situation and then understand the operations related to financial operations, continuously train the skills of reading and analyzing financial statements of enterprises
Becoming an excellent financial analyst requires many different factors, besides having good qualities, it is necessary to learn and practice regularly. For students in economics - finance, getting financial knowledge, the formula of financial ratios is often met, however, when reading financial statements, the ability to receive determine the financial situation of the business, from there, point out the cause and look for innovative solutions to show the difference in real capacity among analysts.

So, what should a financial analyst do to improve his analytical capacity? The article follows the top-down (ie top-down) view, which is to appreciate the understanding of the previous macroeconomic situation and then to understand the activities of the industry and then the business.

1. Understanding the macro economy and the technical and economic characteristics of each business

- The financial situation of the enterprise is greatly influenced by macroeconomic conditions, so an analyst must understand the theoretical knowledge of economics, financial markets, readability and explain macroeconomic indicators on a regular basis, from which, build an overall realization of the ongoing practice of the macro economy.

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- Financial analysts also need to be knowledgeable about the economic and technical characteristics of each business sector, such as: Industry value chain, industry segments, list of companies in the industry and strategy. , their competitive advantage, the financial position of companies in the industry ... Therefore, usually the financial analysts are only the most knowledgeable in the sectors in which he studies the most. Expanding the capacity to analyze other businesses will require time and effort to understand and research.

What do you need to do to become an excellent financial analyst?

2. Understand knowledge about many areas related to financial operations of enterprises

- Understanding accounting and accounting data handling tips: It would be naive for someone to believe completely in the financial data provided by a business because there are many businesses using the tricks. accounting algorithm to process financial data. Therefore, the financial analyst must be knowledgeable about accounting profession, have operations to check and diagnose the accuracy of financial data, adjust financial data in accordance with the purpose analysis.

- In addition to being knowledgeable about the accounting and financial profession, the financial analyst needs to be knowledgeable of knowledge in many relevant areas of the business. In the enterprise, there are basic functions such as: HR, production, finance, marketing and strategy. The financial analyst will have to be knowledgeable about all of this knowledge, especially the analyst must be very knowledgeable about the knowledge of competitive strategy or Ton Tu legal to apply in analyzing steps of competitors in a certain industry.

3. Financial analysts need to build a good database

The hardest part in financial analysis is to have standards for reliable industry averages as a basis to compare and identify the financial ratios of your business as good or bad, high or low. Therefore, it is necessary to build industry-standard targets and to understand the financial situation of companies in an industry in order to identify which companies in the industry are performing well and which companies is not working well and why.

4. Continuous training in reading and analyzing financial statements

- Monitor and read quarterly financial statements such as monitoring the "breath" of life: Financial analysts should constantly read quarterly (and annual) financial statements and financial reports. Six months and every year of hundreds of companies in many different industries. If an individual does not regularly read and comment on the financial situation of businesses in many economic sectors, he will soon lose his analytical sensitivity. In addition, attention should be paid to how the financial data is crowded to the stock price after the information is published and trying to determine the relationship between the financial situation and the share price of the enterprise.

- Anticipate future prospects and anticipate solutions for businesses: Analysis is not only for analysis, financial analysis has the main purpose is to help improve the financial situation and competitiveness of businesses. career. A good financial analyst when finished analyzing a business will have to show: business strengths, weaknesses, solutions and steps needed to improve market position, financial situation and competitiveness of businesses.

- Regularly follow up and communicate with practical people at the enterprise: The source of information from the exchange with practical people helps the analyst to re-examine his or her comments about the industry closely practice or not and also discover the problems that businesses in each industry are facing.

- Regularly reading and studying knowledge, writing regular analysis reports: Research and financial analysis capacity will be proportional to the accumulated knowledge and experience. Financial analysts should regularly consolidate their analytical capabilities on a collaborative basis with financial journals or pages to continuously write and test their analytical knowledge.

Master Nguyen Tuan Duong (Academy of Finance)

Thanks to the internet and electronic transactions, investors have access to many financial markets and exchanges offering a wide range of financial products. Some markets are always open to private investors, while others are still reserved for major international banks and financial experts until the end of the twentieth century.

These markets are not the same because each market requires unique skills and knowledge. Therefore, investors need to determine the right market that best suits their ability, personality and investment objectives; then develop specific skills to profit in that market. Here's a new look at the financial markets available to private investors and what you need to know when trading in those markets.

CAPITAL MARKET

In general, private investors can easily access capital markets and create favorable conditions when trading in this market. However, because there is a limit to leveraging financial leverage, potential profits are also limited. Every government or business needs capital (funds) to finance its long-term investments and activities. To do this, a company must mobilize capital through the sale of stocks , stocks and bonds , in the name of the company. These securities will be bought and sold on the capital market.

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Individuals are seizing investment opportunities more than ever: according to the "Overview of the US Economy" (2001) by Christopher Conte and Albert R. Karr, and the US State Department, "rate of households American families own shares, directly or through intermediaries such as pension funds, up from 31% in 1989 to 41% in 1995 ". Due to the increase in private participation, US capital markets are now strictly managed by  the Securities and Exchange Commission (SEC).

The active participation of private investors, the diversity of products, the limits of deposit and the strict management of the government together, make the capital market become relatively safe. with amateur investors. But low risk will lead to limited profit potential - a typical example of a trade-off between risk and profit . This is partly because there is often a physical limit to the growth of a company or an economy and partly due to the limited leverage. For example, most private investors are not allowed to borrow more than 50% of their shares in their margin account.

SHARE

Many private investors participate in financial transactions in the capital market often through the first stock market. The reason is that this market is quite easy to understand, offers many choices, there are many famous companies and products, easy access and good liquidity thanks to the large volume of transactions, allowing investors to exit. relatively convenient. Given these factors, it is not surprising that the annual trading volume on the New York Stock Exchange has increased almost 15 times between 1980 and 1998 - from 11,400 million shares to 169,000 million shares (according to "Concept."). generalization of the US economy ”, 2001).

MARKET  BONDS

Bonds are debt securities that are bought and sold by investors in the credit market worldwide. According to the Bond Market Association, this market (also known as the debt market, credit market or fixed income market) trades 45 trillion USD worldwide and 25.2 trillion dollars in the United States in 2006. It is much larger than the nominal value of the world stock market. The bond market is considered passive, less risky, and less volatile. This market also has lower profitability than the stock market in the long term.

MUTUAL FUND

In the late 1990s, the proportion of households in the United States holding mutual funds  increased significantly, from only 6% in 1979 to 37% in 1997. Why is this sudden increase? The mutual fund is an attractive method for private investors wishing to invest in a large basket of stocks. The amount of money collected for mutual funds will be invested by professional financial managers in various sectors and sectors while increasing scale allows mutual funds to work actively in their investment process. On the other hand, mutual fund investors are protected somewhat from the inherent chaos of the stock market due to diversification. Profit of mutual fundsStock investment is quite solid, if not spectacular. Investing in mutual funds helps investors without basic analysis, but knowledge of asset allocation and diversification of sectors will help investors maximize profits with a certain level of risk.

INVESTMENT INDEX

Many private investors cannot beat the "large-scale market" indicators like the S&P 500 so they believe that it is safe and easy to buy the whole index. This argument sounds reasonable, but investors must also remember that these indices are fundamentally sensitive to market fluctuations.

However, a small investor with limited time and capital can still achieve higher levels of diversity by buying indices instead of buying individual stocks. Luckily for those who want to invest according to the index, they have two simple and inexpensive options: index mutual fund and portfolio swap (ETF) . Both have low cost rates and high transaction volumes, leading to high liquidity. Invest in indexes without many analytical skills.

MONEY MARKET OR SPOT MARKET

Investing in the cash or name market is more familiar than the complex spot market, the probability of large profits and large losses is high. In the spot market, goods are exchanged for money and delivered immediately. Similarly, the spot market contracts are effective immediately. Prices are immediately determined based on market prices. This is especially different from other markets where transactions are determined at the forward price.

The spot market is quite complex and sophisticated, so it is generally not suitable for inexperienced investors. Spot markets tend to be dominated by so-called "organized players" such as hedge funds, partnerships and corporate investors. The nature of products traded in this market requires extensive network of contacts, detailed information, macro analysis skills and high-level transactions.

Despite this, more and more private investors are rushing into this market due to the high leverage available and the potential for profit. Ironically, the high rate of leverage followed by high risk knocked many young new soldiers. Professional investors often do not trade entirely on leverage. Instead, they apply disciplined money management principles. Therefore, those who intend to trade in this market must first take the time to accumulate experience and learn about it before risking their capital. Another viable option for investors who do not want to miss this "fun" opportunity is to invest in an account managed by an experienced professional.

DERIVATIVE MARKET

The student is given such a name for reasons: its value is based on one or more properties. A birth must be a contract, but in this case, the contract price is determined by the market price of the underlying asset. It sounds complicated, but it is. Obviously, the derivatives market is more complex than the above market so it is not suitable for inexperienced traders who want to speculate. However, it has a  very effective defense function .

Financial leverage is also available in derivative markets, so private investors are also very interested in this market. However, they should invest in professionally managed funds or accounts by derivative investments that require high-level analytical and mathematical skills as well as a deep understanding of macroeconomics.

Examples of common derivatives are forward contracts, futures contracts, option contracts, swaps and price difference contracts (CFDs). These tools are not only complex but so are the strategies adopted in this market.

There have been huge losses made public in the derivatives market. Therefore, US political and management agencies have expressed their concerns about derivatives, as well as investment activities in this market.

There are also many other derivatives, such as structured products and mortgage obligations, mainly in the decentralized market ( OTC market ). Professional investors, organizations and mutual fund managers use them to varying degrees, but private investors hardly look at them.

CONCLUDE

The penetration of private investors into different markets is not a flat path, they have many choices but are also easy to make mistakes. Every available market, even those dominated by traders or private investors, requires specific knowledge as well as a comprehensive understanding of market dynamics. Tools such as internet or electronic platforms only make the importance of market research increasing and perhaps the most important factor that makes investors' success the most appropriate market choice. with your own ability

According to economics, the financial market is a mechanism that allows individuals and entities to trade in financial securities including stocks, bonds, currencies, derivatives and commodities and many types of financial assets. The product has a substitute value with low transaction costs and prices reflecting the law of supply and demand. Both general market groups such as the New York Stock Exchange (NYSE) traded a variety of commodities and specialized markets such as the foreign exchange market that traded thousands of dollars a day.

LEARN THE DEEP ABOUT THE FINANCIAL MARKETS

Stock prices traded on the financial market may differ from the true intrinsic value of securities due to macroeconomic factors such as taxes. Moreover, the information transparency of the supply company also has a strong impact on stock prices.

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A financial market that allows investors to buy and sell shares of publicly listed companies is called a stock market. The word "stock" means stock or company ownership. There are two types of stock markets: the primary market where companies issue shares to the public through initial public offering, and the secondary market where existing securities are bought by investors. sold according to news and platforms of listed companies. Capital markets are very liquid and complex compared to other financial markets.

African Market Focus

The OTC (Over-the-Counter) market is a decentralized market, not through an actual central location, where market participants deal with others through various forms of communication. such as by phone, email and proprietary electronic trading systems.The non-trading market (OTC) and the exchange market are two ways to organize the basic financial market. In the OTC market, agents play a role in creating a market by quoting prices that they will buy and sell a stock or currency. A transaction can be matched between two parties involved in an OTC market without the other party knowing the price at which the transaction is valid.

Bond Market

The Bond Market is a market for all types of bonds and is where organizations come to make very large loans. Normally, when stock prices go up, bond prices will go down. There are many different types of bonds, including Treasury Bonds, corporate bonds and municipal bonds. For example, a bond may be a debenture.

Currency market

Money market refers to markets where financial instruments have short maturities traded. These markets help both companies and governments overcome liquidity problems in the short term, if they have liquidity surplus in the form of cash, they can buy in the money market and in the times The point that liquidity is narrowed, they can sell short-term stocks that are waiting with the company or government in the currency markets. Treasury bills, commercial papers, bank acceptance, deposits, deposit certificates, and bills of exchange are one of the tools traded in the currency market.

Derivative Market

Derivative markets are financial instruments of value derived from the value of other assets, and therefore their value depends on the value of the underlying asset. Derivative securities are perhaps the most complex and groundbreaking products, and that is why the interest in derivatives has increased dramatically and the daily trading volume on the derivatives market has reached. trillions of dollars. Types of futures, futures, options and swaps are some good examples of derivatives used in the derivatives market.

Forex market

The foreign exchange market (Forex) is the largest financial market in the world. Currencies have floating exchange rates and are always traded in pairs. Operating continuously throughout the day, the Forex market trades huge amounts of money, estimated at $ 5.1 trillion a day. Forex is a decentralized market, not through trading tables, where business activities are done via phones, computers, smartphones ... Big players in the market like corporations and commercial banks Trading, monetary centers, retirement funds and investment banks participate in Forex trading with experienced and amateur individual investors.

Different types of financial markets have different functions, and therefore all are important for the economy and the entire nation to operate smoothly