Portfolio Management vs Career Analyst transition, management, research, overall, whether

trogulj

I am at a crossroads in my career. I have been doing buyside research for about 7-8 yrs and am debating whether I want to be a career analyst covering a sector or two for years or transition into portfolio management. Each has its pros and cons. It seems to me that portfolio management is more about judging people's recommendations, knowing which questions to ask when pitched a stock, and thinking about overall portfolio risk and correlations among the securities in the portfolio. I enjoy my current role, but after researching the companies so long, it can become routine.

Thoughts on PM vs career analyst route? Thanks.

hw0799

My goal has always been to run the money. If you have the skills to make and defend sensible investment calls it would have to be portfolio management.

What was your background to get into buyside research?

dvilayphet

Portfolio Management has more macro thinking and portfolio construction in it. Some people like that stuff (I do); others are much better at figuring out how an individual company is performing and likely to perform in the future.

PMs generally have more prestige, but good analysts are definitely worth the money firms pay for it. Economically, it is possible that your value added may be more on the analysis and selection part, in which case, career analyst makes sense.

Also, in a smaller shop, the PM also does a fair amount of analysis though, so that is a way to hedge your bets.

It sounds like it may be worth a try to do PM work. You seem a bit bored with analysis alone, and you can probably go back to it if PM stuff turns out not to be for you.

ba736

I think Dude_CFA and bchadwick both made valid points, and are good points.

Just to add, PMs generally have more client facing responsibilities. While you can have an analyst talking about a sector in depth, clients incline to meet with PM and understand the overall strategy.

For asset owners (investors), it's not so much the line of stock matters. To clarify further, if I have 4~5% in three out of five portfolios then yes, it is important. However, it matters more to understand what the PM is thinking i.e. how they trim the portfolio, hedge risks and position portfolio for upcoming catalysts.