In their analysis of last quarter's Goldman results (‘Goldman Sachs: Holding All The Right Cards’), the analysts at Bernstein Research came up with an interesting graphic on where it would be fortuitous to position your career at each point in the banking cycle.

We’re currently in the fixed income-driven phase led by the likes of Goldman, JP Morgan and Barclays Capital. Bernstein thinks this has longer to run – until at least 2011 to be precise. Once spreads compress and interest rates start rising, M&A will become de-rigueur, and then retail investors will come back.

Goldman Sachs is good for much of the cycle, but lacks a retail presence. Morgan Stanley will come into its own once M&A and retail investing kick in, and boutiques like Greenhill and Lazard will thrive in 2011 if not before.

The pressure is clearly on for BarCap, which is well placed as long as FICC is booming, but has until 2011 to build a strong M&A presence if it wants to stay on top while the cycle plays out.

Click on the image below to enlarge.

Source: Bernstein Research