Job of a financial analyst is not only about analyzing data and reporting it. That is just half of the job. You know, most of the candidates are capable of entering data to spreadsheets and creating some models and report based on predefined formulas in MS Excel. But forecasting, that is a different story You have to define the formulas, choose the model, set the variables and thats not easy.

If you already did it, it is a big advantage. Employers always prefer to hire analysts who have experience with forecasting. Therefor they use this question in an interview. But what to do if you have no experience with it?

Well, the worst possible answer is this one: I have never done any forecasts.

You should never say that. Even if you have not done any forecast, you should do some forecasts prior to your interview and talk about it there. Anything is better than nothing in this case.

Everyone can make a mistake

If your forecasts werent the most successful one, do not let it to take you down. We all are learning and an employer can not expect you to be perfect, especially if you are applying for an entry level analyst job, or for an intermediate FA position. Feel free to speak about negative experience, about bad forecasts. However, you should never forget to mention the lessons you learned from your bad forecasts.

Describe not only the best forecast, but also benefits it brought to your employer or project

When you speak about your positive experience with forecasting, you should describe the added value it brought to your employer. This is very important.

You know, I can forecast that USD/EUR exchange rate will drop next Monday. However, if my company is not involved in international trade or Forex, and does nor reinvest capital, its not an important forecast

Show the interviewers a good forecast you made and convince them about the added value it brought. That is an impressive combination for every recruiter.

Sample answer

Once I used the Bayesian Method to forecast the prices on the local stock market. It was at school, for my seminary project. However, the real market prices were very different to my estimations. It ruined the theoretic part of my work and I had to remake it. On the other hand, I learned that Bayesian Method is not satisfactory and I started to use combination of more methods, especially Bayesian and Reference Class, to make my forecasts more accurate. So after all, it was a positive experience.

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