INDUSTRY ANALYSIS AND POSITIONING STATEMENT
Industry Analysis and Positioning Statement: Investments and Wealth Management
Part 1: Industry Analysis
From the onset, it would be prudent to note that in conducting industry analysis, I will essentially be concerning myself with the political, economic, socio-cultural, technological, and legal environments and how these impact the investment and wealth management industry.
Economy: To begin with, it is important to note that most economies from across the world have taken a beating from the COVID-19 pandemic. While it is still too early to tell what impact the pandemic will have on the economic front in the long-term, there is a high likelihood that we could be headed for a major downturn in economic activity. Most people have lost jobs since February with Ettlinger and Hensley (2020) pointing out that state and local governments combined have lost 1.3 million jobs since February. In such a scenario, it is likely that people will have less disposable income effectively meaning they will invest less and that businesses (some of them listed in the various stock exchanges) will have decreased profitability. It is unlikely that the investment and wealth management industry will emerge unscathed. As Whyte (2020) points out, industry assets have fallen to $102.7 trillion from $104.4 trillion in 2019 ending more than a decade of growth for money managers.
Political/Legal Environment: The investment and wealth management industry happens to be one of the most heavily regulated industries in not only the U.S., but also across the world. This is more so the case given the need to secure investor interests following what has been witnessed in the past in as far as fraud is concerned. According to Deloitte (2020), most of the laws and regulations introduced on this front in recent times have largely been aimed at protecting both consumers and the markets. In as far as markets are concerned, regulators, both domestic and foreign, are focused on data privacy protections to mitigate the risks that result from improper collection, handling, storage, and use of data owing to increased utilization of advanced technology (Deloitte, 2020). As a consequence, those in this space are likely to operate in a more restricted environment.
It is also important to note that the immediate future looks uncertain given that we are in the...
It is not yet clear how things will pan out on this front given that at the time of penning this text, it was still unclear how the transition would unfold given the incumbent Presidents refusal to concede defeat. The prevailing political standoff could be detrimental to the financial markets in both the short-run and in the long-term.
Technology: If there is one particular industry that has been impacted by technology, it has got to be the investment and wealth management industry. This is more so the case when it comes to trading algorithms (Epstein, 2013). For instance, in hedge fund management, there appears to a race of sorts in as far as algorithmic trading is concerned. This is...
…in superior returns are likely to survive in the long-term (i.e. by attracting additional clients and keeping existing ones). This would call for one to have unique capabilities, apart from what has been gathered in the classroom. Warren Buffett has been quoted in the past saying: successful investing takes time, discipline and patience no matter how great the talent or effort, some things just take time: you cant produce a baby in one month by getting nine women pregnant (Connors, 2009). Thus, I remain reasonably certain that the qualities mentioned would give me an edge over my peers.
Points of Parity (POP): I am confident of continuing to perform well in my undergraduate course. Like most of my colleagues, I expect to grasp all the relevant concepts that would come in handy later on. However, I also intend to enroll for the Chartered Financial Analyst (CFA) course. To a large extent, this is considered the gold standard for financial and investment professionals. I have had a few classmates mention that they intend to pursue the said qualification. Upon attaining the CFA designation, I expect to have advanced skills in portfolio risk management as well as better knowhow of financial statement analysis.
Positioning Statement: As a person with keen interest in matters finance and investments, I intend to pursue a career in investment and wealth management with my overall goal being to make use of my professional and personal capabilities (primarily patience and discipline) to grow and preserve the wealth of clients.
Summary Table
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