How would I prepare for the CFA Exam if I had to do it over again?

A few words about the Chartered Financial Analyst (CFA?) designation

The Chartered Financial Analyst (CFA?) designation represents a global standard in the field of finance. The CFA program was developed by the CFA Institute (CFAI), founded in 1947, with headquarters in the USA. Today, CFA Institute has more than 160 associations in over 80 states, as well as 190,000 members in more than 160 countries.

For the candidate to acquire the right to use the CFA after his name, it is necessary to successfully master the CFA program and to fulfill the requirements related to the appropriate work experience. The CFA program implies a great commitment and persistence of the candidate over a period of several years, and obtaining the prestigious title of CFA Charterholder implies passing all three levels of this program. Literature and exams are exclusively in English.

When it comes to work experience, the candidate must fulfill the requirement of a minimum of three years in relevant positions that required making investment decisions or that are directly or indirectly related to financial activity.

Typical job positions for CFA holders are portfolio manager, investment analyst, investment consultant, financial risk manager, investment data analyst, credit analyst, financial director, and financial trader.

When it comes to activities within the financial sector, holders of the CFA title are most often employed in investment management, private wealth management, commercial banking, investment banking, insurance, as well as emerging activities such as FinTech.

What are the benefits of having a CFA designation?

The main advantage for candidates is the acquisition of professional knowledge in various relevant fields, including quantitative investment methods, economics, analysis of financial statements, corporate finance, equity analysis, fixed-income analysis, financial derivative analysis, alternative investments, portfolio management, professional ethics, and wealth management. In support of the importance and comprehensiveness of the preparatory material, the fact that 97% of candidates believe that the material from the CFA curriculum improved their understanding of important areas in finance, as well as that 95% of them believe that the material focuses on relevant areas for their professional advancement (CFA Institute, CFA Program Candidate Survey Report, June 2019).

Global recognition and acceptance by employers are one of the most important characteristics of the CFA title, both for the CFA title holders themselves and for candidates who are on the way to obtaining the title. Namely, in advertisements for investment positions, many employers list the possession of the CFA title or participation in the CFA program as an important criterion for employment. One of the most frequently cited reasons for candidates to take the CFA exam is career advancement.

***Did you know that CFA Institute offers one more designation?

In addition to the CFA title, the CFA Institute issues another designation. It is a?Certificate in Investment Performance Measurement (CIPM?), which represents a specialization in the field of investment performance evaluation. Holders of the CFA designation, as already certified experts in financial topics, have a waiver of the requirements and can take only the second of the total two levels of the exam for this certificate, while all other candidates must pass both levels. The areas covered by this designation are, in addition to ethical standards, the measurement, attribution, and evaluation of investment performance, as well as the selection of investment managers, investment performance presentations, and Global Investment Performance Standards (GIPS?).

If you want to find out more about Investometrix’s CIPM Level I and Level II Prep Courses for the CIPM? Program, please click on the following link:?https://cipm.investometrixgroup.com/

Here are my 10 tips for preparing for the CFA exam:

1.?Study Plan?– According to the CFA Institute, it takes an average of 300 hours of study to prepare for each of the three levels. Let's do a simple calculation. The first level consists of six books - approximately 3,000 pages. So, when we divide 3,000 pages by the suggested number of hours, we arrive at ten pages per effective hour, which seems feasible. However, do not forget to include the calculation and questions at the end of the chapter, which may require more time than the actual reading. In addition, there are many so-called "blue box" examples of case studies within the lessons. You'll have to slow down for that.

You are also expected to learn how to use an officially approved calculator. I recommend the BA II Plus Professional Texas Instrument calculator (one of two financial calculators allowed on the exam).

Did I mention that you will receive practice exams from the CFA Institute? In addition, you will probably need to take another 8-12 mock exams to be fully prepared for the exam. For each mock exam, you will need approximately two and a half hours for the morning session and the same for the afternoon session, add an hour break and allow two to three hours for exam review - so just one mock exam takes one full day.

If you read all 3,000 pages of CFA material, will you be able to remember everything? Probably not. Therefore, you must also provide time for updating the material in your study plan.

2.?Use official CFA Institute books?– All material from independent publishers can only be used as a supplement to the CFA books, certainly not as a replacement. Remember that you will only be tested from official CFA books. The questions and examples from the CFA books are the closest to the actual exam questions.

3.?Be sure to do all the questions in the lessons and the case study examples.?Do not skip the questions at the end of the lessons while reading the books. Mark wrong answers or questions you don't understand. There is no point in guessing the answers at this stage. If you're not sure of the answer, it's okay to guess the correct answer, but mark the question as "guess-based." The first and second levels of the exam consist exclusively of "closed" questions, i.e. questions with three possible answers, of which only one is correct. The third level of the exam also includes questions with structured answers.

4.?Questions Checklist (Learning Outcomes)?– Each question on the exam is based on one or more questions from the checklist. The curriculum is divided into Topics> Study sessions> Learning modules> Learning Outcomes. Make sure you can do all the exam questions. Don't skip anything from the curriculum!

5.?Make your own notes?– Don't just underline text from books. You can use book margins for your notes. I personally like to draw. I find visualization very helpful. I would also encourage you to use mind-mapping techniques during the note-taking process.

6.?Leave one whole month for material revision?– Revise all the questions from the books during this phase. This will help you recognize many patterns. This is a good time to improve your notes. Remember that the learning process should not only be passive (reading and underlining), but you must also take an active role (problem-solving, note-taking, using mind-mapping techniques, etc.).

7.?Start mock exams on time?– Eight to six weeks before the real exam seems like a good idea to start doing mock exams so that you have enough time to improve your weaker areas. Do not watch mock exams before this point. The questions on the mock exams should be new to you (I didn't write unknown). You should treat mock exams as real exam simulations. I personally took mock exams at the same time of day as the real exam. Do not use spreadsheets or your notes. It should be a real testing experience. Be sure to review all questions after completing your mock exam.

8.?Psychological and Physical Aspects?– This journey will probably take at least six months of your life (for each of the three levels), make sure you don't pay a high price with your health. I find a daily ritual pattern very helpful. Make sure you eat healthy and exercise during your study period. The best way to deal with anxiety before exam day is to be well-prepared and have a margin of safety.

9.?Time Management on Exam Day?– Knowing the CFA material is not enough. You must be able to complete each session within three hours (the session times have changed slightly under the new computer testing rules). Taking the CFA exam without having previously completed real-time mock exams will almost certainly result in failure. It is important to note that the exam is conducted by computer, within the official premises of companies for taking various expert and professional exams.

You can save a little time by using calculator shortcuts and you can save a lot of time by going through the practice questions repeatedly until you are able to recognize the patterns and master all the necessary skills.

10. Find a CFA Institute Prep Provider – Don't forget, even the best athletes have someone to make sure they reach their goals.

Only prep providers on the official list www.cfainstitute.org/en/programs/cfa/prep-providers are permitted to use the Learning Outcome Statements (LOS), which are the building blocks of the exam. Additionally, the CFA online resources are only accessible to the CFA Institute Prep Provider on the official list at the CFA Institute website.

If the prep provider is in NOT on this list, they are NOT a CFA Institute Prep Provider. Do not put yourself in a position to use the old-illegal CFA books copies or questionable materials based on that as part of your CFA Prep, that do not address the current curriculum. Always make sure to stay in good ethical standing and as a CFA Candidate protect the intellectual property of the CFA Institute.

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