Why Investment Banking Makes A Great Career

Why investment banking makes an exceptional career to be in and to work towards has been asked for many years, and is still being asked now even as the economy continues to suffer. There are many who do extremely well from investment banking, and some who are able to retire early with enough of a pension to fund their lifestyle for many years to come. It has to be said, though, that investment banking is an extremely difficult career to break into, and also that it involves such intense work and long hours that many burn out.


The first step in understanding why investment banking is a unique career is to analyze the work which is actually carried out by these banks. If you are only familiar with the banks who offer you checking accounts and take deposits, this is something entirely different. An investment bank is an institution which has two distinct roles. The first of these, know as the selling arm, is the issuance of stock into a waiting market. This is the foundation of the free market economic system, and is carried out to raise finance for corporations. The best investment banks are able to call extremely accurately the price at which the stock will sell.

investment banking

There is another side to investment banking, which involves investing funds on behalf of institutional investors and wealthy individuals. These investments are often in the stock market, either in individual stocks or in mutual funds. This is the reason why investment banking has to be so heavily regulated, because if there was collusion between the two departments, investors could be directed to buy into the stock issues which were being created by the same organization, on which it was making a guaranteed profit. Investment banking is heavily regulated in the Western economies, and a trail of money movement is monitored.

If you want to know why investment banking is so difficult to break into, it is simply because of the numbers of people who want to break into it for the exceptional financial rewards. Even before jobs became as scarce as they are now there were still far too many people chasing too few jobs. This is despite the fact that you need to be a college degree holder to even stand a chance of working in investment banking. Most investment bankers enter the profession as analysts, who are the at the bottom of the food chain. They work long and hard providing the data which other employees use.

It is possible to bypass the early years as an analyst, but only a few ever do so. Some students who manage to get onto exceptional MBA courses are actively hunted out by investment banking firms, who know that if they don't get an offer in first someone else will. These people are seen as the future, so the banks are prepared to take a risk on them becoming associates right at the start of their career. This means more money right from day one, but it also means that a long term commitment is needed.

The reason why investment banking is still a popular career is the most obvious reason of all, dollars. There are many people who have gone on to have successful careers, but even those who remain within mediocrity in this career are earning a comfortable salary. The downsides are the intense pressure and working conditions, the extremely long hours, and the fact that many investment bankers burn out at a young age. Despite this, there are many positive reasons to give to anyone who asks why investment banking.




Investment Banking News: