|Author||Topic: CFA Level 1 Preparation Strategies|
|As a guest speaker, I thought I'd offer my two cents to address the common question on 'How to prepare for the CFA exams?'.
Regarding the CFA program, I am a strong proponent of it as I believe it provides a competitive edge in your professional career. I completed the exams in Jun-13 and was fortunate enough to clear all three on my first attempt. However I am still in the process of fulfilling the work experience requirements before I can apply for award of the CFA charter.
This particular post is intended for Level I candidates. An IMPORTANT disclaimer here - these methods are not set in stone and what worked for me, may not work for others. I believe everyone has a unique study approach and you should follow what suits you best.
Now that you've decided to take the plunge for the CFA exams, it is best to start early and space out your study schedule.
The Schweser guides and AnalystNotes pro package both do a good job of explaining the concepts in a concise way and they were my primary source for Level I. However do not underestimate Ethics! The curriculum is by far the best source for this section and I would suggest staying away from Schweser on this one. The level of depth, range of examples and difficulty of the questions are very exact. Granted yes, the readings will be boring at times, but you have to tough it out. Regardless of how ethical you think you are (morally and professionally), the CFA curriculum has very fine margins.
The monster of the Level I exam is Financial Reporting, holding 20% of your score - give it the respect it deserves! The readings can be much more complex as compared to the general finance courses you may have studied at the undergrad level. Topics such as Deferred Taxes were a nightmare for me.
I would recommend going through the entire course at least twice. Complete one reading and hit questions of either Schweser or Analystnotes (but not both are they are similar in terms of quality). This should build up some confidence for the blue-box examples in the curriculum and the EOC's. The curriculum EOC's will be the most accurate reflection of where you stand. To some degree, you need to be harsh with yourself - questions that you guessed correctly on, should be clubbed with the incorrect ones. Regardless of how lucky you have been in different spheres of life, or even if the stars have aligned for you recently, you may not be as lucky on exam day.
The number of formulas to memorize are significant and the best solution for these are flash cards. Questions that require using formulas in a simple manner are brownie points - don't waste them! I would recommend making flash cards once you're in the final month and keep reviewing them on and off.
I followed a self-imposed which said 'never jump the gun'. I took it one reading and one book at a time and went with the natural flow of the curriculum. In this way you can ensure complete focus on the material in front of you. If you look ahead, chances are that you may not like what you see and that can play on your mind.
Finally practice, practice and more practice! Unfortunately this is the harder route and one candidates generally tend to ignore. However this is the only route to get through these exams and the importance of this will grow over Level II & III. Mock exams should be a part of your preparation and I would strongly recommend attempting the first one at least one month in advance of the actual day. Choose a nice quiet environment and time yourself. You may start to feel mentally exhausted through this but do not throw in the towel. Over several exams you should be able to get used to the serious mental gymnastics needed over six hours.
It is natural for candidates to also debate over the order in which questions should be attempted. During the practice exams, run some permutations and try to firm up an order which suits you. Use this in the real paper also!
Repeat the practice exams if you have to. Over the last two weeks , I would recommend a gradual phase down. Study lesser and lesser as each day progresses - yes you read that correctly! You need time to recharge your batteries before exam day. I firmly believe that if you've put in the hard work over the previous months, you should be confident in your own abilities to do well on the exam.
On exam day, get to the venue early. It's best to acclimatize yourself to the surroundings. Also, keep a provision to dress warmly (a jacket maybe) since the exam hall may be colder than you think, regardless of the blazing sun outside!
Finally, try to stay in the present. Think of the question in front of you and nothing else.
Hope this was useful to all readers. Any follow-up questions are more than welcome. I will address the Level II and Level III exams in the later blogs.
CFA Discussion Topic: CFA Level 1 Preparation Strategies
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!