One of our CFA tutors typed up a long email to his student to wish him a happy new year! We thought it is worth sharing his advice as it may be beneficial to most CFA Level 1 students.
My dear CFA Student,
Happy New Year!
You have less than 6 months left for your CFA Level I exams. We have discussed your preparation and various strategies numerous times. I thought I’ll take some time to highlight some key points as a reminder for you as you continue your preparation for your CFA Level 1 exams.
Understand the Material. No Shortcuts!
The CFA program is rigorous. To come out of the three CFA Levels with flying colors and in the first attempts, you must truly understand the CFA material. There are no short cuts. In fact, you must not even seek short cuts! The time and effort put in to truly understand your material in Level I will pay off 100x or 1000x over Levels II and III as well as the rest of your career in finance.
So commit yourself to truly understanding the material well in your heart, mind and daily routines.
Every Day & Every Week Counts
Little drops make the ocean. You only have 6 months or 24 weeks left for the CFA Level 1 exam. You have 12 modules for in Level 1. This means you only have 2 weeks per module at best. Some of the modules like Financial Analysis and Reporting have significantly more content than others, so you need more than 2 weeks or more for those modules leaving you less for some other modules. Losing a day or week may mean you will not have time to be fully prepared. So every day and every week matters significantly. You cannot afford to take it easy or loose a day or week from today.
What you do daily is going to count.
Bite Size Pieces. Break Down the Material into Components
The CFA Level 1 content is vast. It is quite intimidating to look at all-together in one section. But if you break down the CFA Level 1 content into components and sub-components and assign each sub-part into weeks and days and it will become far more manageable. Breaking down the content into components and sub-components will also make studying for the CFA Level 1 less stressful. In fact seeing your progress as you tick off components and sub-components will give you satisfaction and encourage you to press on further. Breaking it down will help you focus on what you need to do today or this week and do it thoroughly.
The whole is a sum of the parts! Take bite size pieces of the CFA material to chew at a time.
There are various tools to help you plan your study path beginning today up until your exam date. Choose any one: an app, website, paper, Excel and make a plan. The plan must take into account your progress till date, your learning styles and your strengths and weaknesses. You can plan to study a variety of subjects together or one subject at a time. Make sure that this plan is one you can execute on. Whatever your preferences make a plan for every week and everyday from today and stick with it.
“Failing to plan is planning to fail”
Make a plan and stick to it. You may have heard this statement somewhere (attributed to Benjamin Franklin).
Pro-CFA tip: When you make your plan, please keep adequate time for revision and mock exams closer to the exam dates.
Pick your CFA Preparation Material Strategies
There is plenty of material on all the subjects and topics you need to cover for the CFA level 1 exam. The CFA Institute has sent you materials. There are various optional CFA specific materials available from different services like Scheweser Notes, Efficient Learning, Analyst Notes, Cliff Notes, etc. There are notes to the concepts and question banks. There are websites offering you tips, video tutorials, mentors, etc. In addition there are various text books and online resources for each subject and topic. There’s just plenty of material (some great and some simply a waste of time!) in fact way too much. You must have a clear strategy on what material you will use. It doesn’t matter what your strategy is make sure you think through what is most appropriate for you given your time and learning preferences and stick with it. Otherwise you will end up moving from one to another and find you have not covered all the material you need to cover.
Here’s my recommendation, use the Scheweser Notes that you already have as your primary source and use the CFA Program’s material as supplementary material whenever you find you need a deeper understanding of specific topics. I am recommending this approach because the CFA Program’s material is very elaborate and detailed. It may be difficult for you, given the limited amount of time remaining, to read and understand every word or every page of the CFA Program’s material. The Scheweser Notes are a little more condensed and so far easier to cover than the CFA material. So start with the Scheweser Notes but make sure you study it thoroughly. Make sure you understand the material well. Do all the practice questions given. Wherever you feel you need more elaboration on a topic, please use the CFA Program’s Level I material for a more detailed review.
Don’t go beyond what you’ve chosen or decided on unless you must or only as rare exceptions. You simply do not have time to explore all the material out there. So pick your material strategy and stick with it. Do not move away from it.
Practice! Practice! Practice!
I’ve already spoken about the importance of understanding the material. I want to go further, do not read some material and assume that you have understood. You only understand the material if you and apply the concepts covered in different circumstances. You must do all practice questions at the end of each chapter and get them right to be certain you have understood the material well. Even if you did understand the CFA Level I material, applying them to questions helps in reinforcing the concepts that you have learnt in that chapter.
In fact, I suggest you review all the questions in detail before you read the chapter. Then, after you read the chapter, work out every question. Research has shown that attempting questions before your study a chapter helps you grasp material better than just attempting the questions only after you have done the chapter.
I also recommend subscribing and paying for question banks that will give you access to more practice questions. Different types of questions require the application of the same concepts from different angles. So more questions and different types of questions help you understand the concepts better and from different angles. However, you have to decide if you have the time for additional question practice give your time constraints.
Mock Exams are Super Critical
It is insufficient to practice on chapter and questions. It is super critical to work through full exams or mock exams so you are able to handle questions and recollect concepts from different modules when they are all jumbled together.
End of chapter questions usually deal only with the concepts covered in those specific chapters so it may be easier to know which concepts are being tested and apply them on questions. In an exam you will have questions from all the chapter and concepts. And when you’re dealing with all the concepts together it may not be as easy to identify which concepts are being tested when compared to doing questions from one chapter at a time. So as you get closer to the exam or towards the end of each module make sure you’re working out questions that are from the whole module and not just from individual chapter.
The CFA Level I mock exams are super critical to practice with. You do get access to a few mock exams along with the CFA Institute’s program material. It’s worth subscribing and getting access to more mock exams from other CFA publishers. And the more mock CFA Level I exams you do, the better you’ll be prepared.
Daily Routines & Blocks of Time
Set up and settle into a daily routine. We are creatures of habit. Settling into the same daily routine will tremendously increase your efficiency. If you’re working or looking for a job then plan accordingly. Allocate time before, in between or after work for your CFA Level I studies. Make it a routine.
Block aside one or two or eventually three hours slots where you turn off your phone and other distractions. Commit to study for that entire block of time. You could start with one hour blocks but please make sure you increase it up to 3 hour study blocks. Your exams are 3 hour long sessions. And so it’s very very important that you train your mind to be able to focus a hundred percent for the entire 3 hour duration. And believe me it takes practice. If you don’t practice concentrating or studying for 3 hours together till the day of the exam, you’re not going be able to concentrate for the entire 3 hours during your exam. If you just started your CFA preparation, start with 1 hour study blocks. Make sure you focus for the entire hour. After a while move to 2 hour study blocks and closer to the exam work on 3 hour study blocks. This will help you build up the mental stamina required to concentrate for the entire 3 hour duration of the CFA exams.
While you set up and settle into a daily routine, it is also important that you are studying and practicing during exam times. Your exam is given during the day. I’ve had students who are night owls and failed because their mind wasn’t working during the day (exam). Your exam is given during the day, so make sure your mind is prepared and alert during those blocks of time.
When you make your study plan, try covering a hundred percent of the material. Some papers like Financial Reporting and Analysis have more weight in terms of points. But you do not want to ignore topics that have less weight. Plan to cover all the material expected by the CFA program for Level I. Yes, definitely allocate a little more time and give more importance to modules with higher scoring possibilities like Financial Reporting and Analysis.
For the CFA Level I exam you may escape with little loss if you skip a few topics because each points allotted to each question is small in terms of the overall total score. In the CFA Level 2 exam and CFA Level 3 exam it is critical to cover all the material because each question has a higher weight in terms of the total score. As you prepare for the CFA Level I exam make sure you understand all the material you are covering even if you don’t cover a hundred percent of the material.
I hope these tips will help you in your CFA Level I preparations. As always, I will be glad to be of assistance as you continue your CFA preparations.
Eagerly waiting to toast your success in the CFA Level I exam this June!
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