How to Study - CFA
How to Study for the CFA ExamI recently interviewed a Chartered Financial Analyst (CFA) Charter Holder to gain some insight into how to best study or prepare for a CFA exam. Here is what he told me:
1. Start early - CFA program tests are designed to test your breadth of your knowledge as opposed to the depth. Study guide provided by Chartered Financial Analyst Institute (the textbook you receive when you register) is over 2000 pages long. So, give your self good 6 months of preparation if you are currently working or going to school.
2. Get support- Create study group. Get support and motivation. Three years of dedication takes lots of patients and motivation, so get together with your fellow test takers and pull each other through this tough journey.
3. Study each book thoroughly- Every single page of it counts. No, every single paragraph counts. It seems CFA loves to test you on topics that majority of people think it is less than important. As you progress towards level II and III this principal becomes more significant.
4. Do lots of practice questions- Purchase question banks. Search online for past exams.
Just as SAT and GMAT, being smart and knowing material doesn't necessarily lead to higher score. Practice tons of questions and be a good test taker.
5. Find balance between your life and CFA preparation- Everyone knows preparation for CFA designation is extremely time consuming. I've heard people complaining that they can't find anytime for their family or leisure. Although, it is important challenge, it is never worth it if this challenge compromises quality of your life.
What CFA study materials do you use and why?
There has been many discussions about which materials are best to use. General opinion is that since most of publications are sufficient enough to get you through the program. However, third party publication such as Schweser and Stella are more consice and easier to digest compared to official CFAI textbook which is provided to you with your registration for free. Rule of thumb is to study with whatever you feel comfortable with, but make sure you do questions on CFAI textbooks and mock exams that is available on CFA website few weeks prior to test date, because it is better reflection of what real test will look like.
Disclosure: I am part of the group who runs the Certified Hedge Fund Professional (CHP) Designation Program.
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