Follow-Up: Investment Banking vs. Sales and Trading

As a follow-up to the post comparing a career in Sales & Trading to that in Investment Banking, there is much more to be discussed than simply sleep deprivation, caregiving and assistance allowed by the work hours, and the financial strain (or lack thereof), in regards to aging. In fact, the stress levels – in terms of duration and intensity – are much different in the two careers.

It is difficult to gauge which career has a greater amount of total stress, the two careers each experience stress in different durations and intensities. Individuals in Sales & Trading feel a greater sense of urgency and pressure to deliver results, because the market is only open for a set number of hours. In that sense, the stress is more concentrated in the specific time frame of trading hours, and due to this being a relatively short amount of time during a day, high stress is generated from the limited time frame to complete work. Professionals in Investment Banking have specific due dates for work, rather than specific, immediate time frames to accomplish tasks. This may lead to a similar amount of total stress to that of Sales & Trading professionals, but it is much more spread out over time. Investment Bankers can stay late or work all night to get something done for the next day, whereas Sales & Traders are out of luck if they can’t make a sale or trade by the closing bell.

Sales & Trading professionals do feel an added amount of stress due to the high risk nature of their job activities, and even a minor mistake could lead to an individual being fired. Sales & Trading professionals deal in real time and real dollars, and even a minor mistake of adding an extra zero to a trade could lead to massive differences in profits or losses. Proprietary traders (traders who invest and trade with the financial firm’s own money) have even higher levels of stress, due to the high volatility and riskiness of their jobs. Investment Bankers have much more time to examine and double-check work, and mistakes are much more highly tolerated than mistakes in Sales & Trading. To that end, the stress can be considered to be less in investment banking.

As mentioned in the previous post about stress experienced as an investment banking analyst, stress can have major effects on an individual as he or she ages. One’s physical appearance (hair loss, grey hair, etc.) as well as physical health can severely suffer from abnormally high levels of stress. Sales & Trading and Investment Banking professionals who spend their careers in the business can grow so accustomed to being exposed to high levels of stress that it almost becomes they cannot function normally without. They grow so used to being stressed out, that even when things are calm and collected, they find something to stress about, even if it is minor. The problem these professionals face as they age is that when they do retire and leave their careers, they are likely to be highly stressed out adjusting to the aging process. For example, a retired investment banker in a retirement home may unnecessarily find small things to be stressed about, which is not only unhealthy for the retiree, but it can also cause problems for the other residents of the retirement home. Sales & Trading and Investment Banking professionals will therefore both face a higher level of stress adjusting to the aging process, as well as settling in an institutional or private care setting.

Investment Banking Analyst – Part 2: Stress

Continuing from the previous discussion of the sleep deprivation effects of being an investment banking analyst, the arguably most detrimental aspect of the job is stress. The stress is generated from a lack of sleep, free time, and opportunity to receive care from others, as well as immense pressure in the workplace to produce error-free work and meet tight deadlines. Stress obviously has a long list of health effects; the most important of which are, arguably, the effects on aging.

As mentioned in Part 1 of this series, sleep deprivation can cause an investment banking analyst to feel as though he or she has physically aged four years in two years’ time. While sleep deprivation plays a major role in this feeling, stress also is a major factor in driving that feeling. Stress can also turn that feeling into a reality – stress has been noted to cause grey hair at an earlier age, or even hair loss at an earlier age. Looking and feeling older are not desired traits by young adults around age 25.

Another fallback of the immense amount of stress placed upon investment banking analysts is they grow used to it and learn to expect stress in their lives. That is not to say necessarily that analysts learn healthy ways of dealing with stress, however. Stress becomes such a constant and ongoing part of their lives that even in situations without stress, analysts commonly find or create stress to make that situation revert back to “normal” for them. Although younger Americans are typically more stressed on average, investment banking analysts take this to a whole new level as stress becomes an unhealthily expected part of their daily lives.

As touched upon briefly before, stress can cause a change in physical appearance, but it can also take a toll on the overall health of the body’s organs. The normal physical aging and aging in appearance process an individual’s body might go through is severely accelerated by working in investment banking. In addition to looking and feeling older, the body may actually be older at the end of one’s stint as an analyst. Stress can increase the risk of cardiovascular disease and hypertension in the heart, ulcers and other digestive issues, and even skin problems, which would have either not occurred at all or occurred in later life. This accelerated aging and creation of health risks are downsides of the job directly attributable to stress.

Stress in one’s life should decrease as they age. The issues and uncertainty associated with puberty, maturing, finding a job, and starting a family certainly cause stress to be high beginning in the late teens to mid twenties. However, as people grow older, more decisions are set in stone and settlement takes place, thereby reducing uncertainty and the sense of worry. This would lead to stress decreasing as people age, which holds true for Americans. I would also expect this to hold true for investment banking analysts, but due to the high stress in investment banking and analysts being accustomed to stress as part of their lives, I predict analysts maintain a higher level of stress than the average and take longer to begin becoming less stressed. As far as aging is concerned, a lower level of stress for a shorter period of time would appear to be ideal, but in the case of an analyst, he or she would experience the exact opposite. This could lead to serious aging consequences down the line.

In summary of Parts 1 and 2, sleep deprivation and stress are very real aspects of the lives of an investment banking analyst on Wall Street. Both inevitably accompany the job and create serious impacts on the aging process. College students considering entering investment banking should strongly consider these issues before pursuing a career in the field.