SmartFinancialAnalyst.com

2 Months To Go And You Lack Motivation? Might As Well Give Up…

SFA — Mon, 08 Apr 2013 10:00:57 +0000

I received an email yesterday from a reader who is studying for his CFA level 1 exam in June 2013.. he has 2 months to go and told me he’s made decent progress but has lost much of his motivation. I was shocked to hear that. Almost anyone entering the exam has a shot and certainly with 2 months to go, passing is within reach. But if you remember, I firmly believe that the whole exam’s success depends on those 2 last months.

You Might Get “Sick Of It”

I’ve certainly had my moments where I could not get myself to look at my material for a few hours. I just took a small break (2 or 3 days) and was back at it. I never would have described it as “lack of motivation” though. I never felt that way. The problem is that if someone is already feeling that way with the challenging part of the studying barely getting started, how is it possible to hope that this person will be ale to start making the CFA his top priority for those last 2 months?

Commitment Is Step #1

I always say that the first step before even signing up for the CFA exam is making sure that you are ready to be entirely dedicated to that new exam, especially in those last 2 months of studying. I understand that sometimes we have a lot going on and cannot focus enough energy and time on the CFA. That’s more than fine. But just don’t sign up:)

Where To Get Those CFA Mock Exams

SFA — Thu, 28 Feb 2013 01:57:07 +0000

For those who have read my CFA studying strategy ebook, you know that I recommend doing a ton of qbank questions as well as 10-20 mock exams. Just to clarify, I mean the 3 hour ones (some would say these are “half exams”)..they would generally have 120 multiple choice questions. So where can you find so many mock exams? It’s actually not that difficult:

-CFA Institute website

http://www.cfainstitute.org/programs/cfaprogram/courseofstudy/Pages/sample_and_mock_exams.aspx

By signing up for the exam, you get access to 1 mock exam. You can also buy 2 sample exam for $40 per exam. It might sound like a lot of money (in a way, it is),

-Schweser:

http://www.schweser.com/cfa/faq/cfa_faq_availability.php

Schweser is the leading CFA preparation company and they sell many different products including 2 full book of practice exams

-Analyst Notes:

http://www.analystnotes.com/

You can also use these services to help you prepare, they do have practice exams although I have not heard much recently, I personally got a lot out of this website when preparing for level 1.

In terms of qbank questions, which are quick and easier to do when you have less time, Schweser and AnalystNotes are your top options..!

These Are Critical

I’ve written about this but I basically feel like time spent on mock exams and qbank questions is by very far the best way to spend time studying. Just think about it.. it’s very likely that in your actual exam, 70-80% of the sets of questions (except for ethics) will be similar to sets that you’ve done in mock/practice exams. If you are able to do and understand the vast majority of those questions sets while doing mock exams, you’ll have a huge start for the actual exam.

So 37% Of CFA Candidates Passed Level 1 Last December

SFA — Mon, 11 Feb 2013 10:00:03 +0000

The CFA exam is as difficult as any type of exam you’ll find in the world of finance. The 37% passing rate of level 1 last December is not much of a drop off of the 38% from last June. That does NOT include candidates that simply did not show up for the exam (somehow many think the passing rate is low in part because of all of those who don’t show up).

It Does Get Better Though

Last June, the passing rates were:

Level 1: 38%

Level 2: 42%

Level 3: 52%

Of course, even the average talent of level 1 candidates is quite high so seeing a 37% pass rate can be discouraging. In a similar way, that 42% rate for level 2 is slightly higher.. but it is 42% of the 37% that passed level 1…

Don’t Forget That..

It’s actually a great thing to see such a low passing rate: I’ve written about this. Just think about it, that is what makes the CFA title so valuable..

It’s About Being Efficient: Again last week I met someone who was taking 3 weeks off to study.. 2 in February and one just before the exam. I’d call that poor management. If you’ve seen my ebook, you know that I believe it’s not about how much time you spend studying, it’s about:

-Having a solid plan

-Sticking to it

-Those critical last few weeks are where everything gets decided

Do you know anyone who did the December exam? If so, how did it end up going?

CFA Jobs – What To Expect?

SFA — Mon, 07 Jan 2013 11:00:38 +0000

It’s no secret that while some of us enter the CFA program simply to challenge themselves (5% according to the most recent CFA institute survey), a far higher portion to it for career advancement. For most of us, that means finding a new job. If you had decided to do the CPA for example, your next step would be a very clear one. On the other hand, MBA graduates have a very broad opportunity in front of them. Somewhere in the middle there lie CFA candidates. They will sometimes end up working in the corporate finance departments of large companies no matter what the field but I think it’s fair to say that in the vast majority of cases, CFA charter holders end up working in the financial industry.

In most cases, we end up working for buy side companies such as:

-investment companies & mutual funds
-wealth management
-hedge funds
-banks
-insurance companies
-pensions
-etc

What type of jobs? I would say that these are the most common jobs for CFA holders:

-portfolio management
-analyst (research analyst for example)
-traders
-risk management

All of these can be done for equity, fixed income, foreign exchange, private equity, etc. There really is no limitation there. The most important part is trying to figure out where you’d like to end up working by reading about those places, meeting with current and former employees, etc.

Using Your CFA Title To Your Advantage

Once you hold the CFA charter, you will be part of a local affiliation. This should help you get in contact with some well positioned individuals that can guide you. They might not give you that dream job right away but over time, they might provide you with valuable contacts and tips. Most local chapters also have job boards which will have jobs that would normally make a lot of sense for you to register for.

Studying The CFA In A Digital Era

SFA — Fri, 28 Dec 2012 15:49:55 +0000

Studying used to be rather difficult in a few ways. One of them was that studying required you to either have your CFA institute books or the Schweser ones.

The Benefits And Challenges Of New Technologies

I personally think that the greatest challenge is that it’s easy to become overwhelmed. In theory, you could read the books, summaries, try qbank questions, mock exams (official and non-official), visit websites, forums, try ebooks (such as the one I wrote!), try some podcasts and mobile apps, etc. There’s no end really and you could possibly end up studying for several weeks on one specific subject.. worst of all? You might not even understand the material. Why?

It’s All About The Plan

More than ever before, having a solid plan is critical. If you try to understand every page/minute of material, you’ll never get to the end of it.

The Critical Part

Have a clear plan and be consistent. Every week, plan with that plan in mind. Don’t rethink it, redo the plan and adjust every few days. You’ll end up losing more time than whatever you do gain. At the most, the plan should be updated every few weeks.

Bonus Material In Bonus Time

I’m more than fine with adding other sources of material. For example, if you have a podcast that discusses the material, there’s certainly no harm in listening to it on your way to work. Why? Cause it’s not as if you would have been doing your studying, qbanks or mock exams. But if you’re at home, on a planned evening of studying, please don’t start to wander around looking for other ways to nail the material. Passing the exam, as I always say, is about having a plan, sticking to it and focusing on the key material. That is what will make you pass or fail.

Do You Struggle With This?

I’m the first one to admit that I can easily have my attention taken away, especially when I’m online, while studying. There are some apps that block out other websites or stuff like that and I know I could use those but in general, if I remind myself of how critical this exam is for me, what would happen if I ended up failing, etc.

Studying The CFA Exam With The Previous Year’s Material

SFA — Tue, 04 Dec 2012 02:39:06 +0000

It’s a question that I get over and over. The two main reasons why this happens is:

-unfortunately, you failed the exam and are ready to retry it the next year
-you got your hands on material owned by someone else

As you can imagine, there is no right or wrong answer on this. Here are my general thoughts:

-I would not consider using material that is over 1 year old: It might still be good enough but I don’t think it’s worth taking the chance. How much are you really saving?

-If the material is 1 year old or less, I might go for it. I do think it might end up costing you a few % in the exam. It’s not 10% and is perhaps 5% but likely less than that. The question becomes: Are you willing to pay $XXX to increase your score (and the odds that you will pass) by 5%? Only you can answer that question.

I personally would consider doing it, it all depends on how much you value your time. Why? Don’t forget that your main investment in the exam is not the material or the amount you paid to sign up. It’s all of the time and sacrifices that you put into the exam. Once you know how much you’re putting in, you’ll be able to determine what the best thing to do might be.

Don’t Look Back

If you do end up deciding to use material from the previous year, then don’t question yourself later on. This is not a big factor in helping you pass or fail the exam. Everything else, especially having a solid studying strategy makes a lot more sense.

Have You Been In This Situation? Did you end up studying with the older material?

Is The CFA Worth It? You’re Kidding Right?

SFA — Sun, 18 Nov 2012 11:00:54 +0000

Yesterday, I was asked if doing the CFA program was actually worth the effort. I paused and wondered how I should answer.. I finally sent the following:

“If you’re asking me this, probably not”

I wanted to get some kind of reaction and it worked. Within minutes the guy asked me why I would answer that. Here are a few of the many reasons why:

-Getting a job in finance is easy, getting a great one is though: If you’re not sure that the CFA is worth the effort, then you’re probably not the type of person that will be willing to do what’s necessary to get the job anyway… sure there are exceptions like having great contacts, etc. But as a general rule, I think that those that end up with the best jobs would see the benefits and just dive into it.

-You should welcome the challenge: In a world where setting yourself apart is increasingly difficult, a program like the CFA is actually a great opportunity to set yourself apart

-It Doesn’t Have To Take You 800 Hours: I know that many think it’ll take you months and months but as I explain in my ebook, it doesn’t have to be that way. It’s much more important to be smart about how you’re studying, what you focus on, etc. You can take a look at my ebook for more info

-Yes the benefits are important: If the average CFA charterholder is making $200K or so per year depending on the location, then I think it’s safe to say the benefits are significant. Not convinced yet? Take that extra 100K for example, every year and calculate the present value… how much is that benefit worth? I’d say it’s a no-brainer

-If You’re Unsure Now, Wait Till It Gets Tough: The CFA is certainly not easy. But if you’re not even sure it’s worth it before starting, wait till you’re in your final month, lacking sleep and time to hang out with friends and family, and unsure that you’ll even make it

What are your thoughts? Are you considering taking the CFA exams but unsure if it’s worth it? I’d love to hear from you

How The CFA Helped Me Get My Dream Job

SFA — Mon, 08 Oct 2012 12:00:09 +0000

After finishing school, I ended up working in the back office of a big bank, with no clear idea of where I wanted to go or how I’d ever get there. I was working in the derivatives section on futures, stock options and otc trades learning a lot which was great. I was happy but I knew that it wasn’t exactly my dream job either. I wanted to work in a front office job, ideally as a trader or managing some type of portfolio. That in itself is somewhat specific. Over the years though, I found out that I didn’t just want any trading job. There were some jobs such as retail trading that I was hoping to skip in order to start trading derivatives in that same bank.

How Would I Get The Job?

Yes, I got to know quite a few people and I did a very good job Unfortunately, that is not always enough and I wasn’t sure how I’d ever get that job. The problem wasn’t even getting the job but even getting an interview. As you know, it’s often about knowing the right people and in my case I did know a few key people. I did have another challenge though. I had been working in the back office and as good of a job as I was doing, proving that I was solid enough to work in the group wasn’t easy.

Passing The CFA

Over the time that I got experience in the back office, I was also able to do my 3 CFA exams and when I applied, adding those 3 letters to my resume ended up making a big difference. Why? First off, in almost any group, you will have a few who have passed the exam but also others who were unable to complete it. No matter what the reason, the fact that I had passed this exam that so many others had did and failed was proof enough that I deserved a shot. I know of a few others that had a similar background but didn’t get called for an interview. I would imagine that the CFA was a major factor.

In the end, I think that the CFA did not get my job. It did however get me an interview and an opportunity to prove myself which is exactly what I was hoping for. It would be hard for me to tell you how much I appreciate this every day while I head to work. Going to a job that I love, that stimulates me and that is well paid if a gift. I do think that I might have been able to land this job without passing the CFA exams but there is no doubt for me that it would have been a lot more unlikely.

So to me, it was a no-brainer and I’m grateful to have passed the exam. How about you? Do you think the CFA will help you land your dream job?

Passing The CFA Exams, Still A Top Way To Increase Compensation

SFA — Sun, 16 Sep 2012 02:29:06 +0000

If you asked most CFA candidates why they are doing the exam, I’d imagine that the two main answers would be:

-to increase my salary
-to further my career, get a promotion, etc

Those two end up meaning the same thing when you think about it. No surprise I guess and I’d be the first one to admit that it was the case for me as well (and it ended up working, more on that soon!)

Last week, I came across a new survey done in Canada with CFA charterholders. The average compensation for title holders in 2011 ended up being $239,215, an 11% increase compared with 2010. Now you’d probably be right in saying that the average could be skewed if a few CFA charter holders are making millions. That makes sense. The median was actually $157,500! Still very decent right?

In case some of you live in Canada, here are the averages for CFA charterholders in a few big cities:

-Calgary ($269K)
-Toronto ($250K)
-Vancouver ($231K)
-Montreal ($211K)

What are your thoughts? I certainly feel like those numbers are incredibly solid and it’d be difficult to find other titles (even the MBA) that would beat those numbers, don’t you think?

Sacrificing Sleep To Study For The CFA

SFA — Mon, 27 Aug 2012 12:00:31 +0000

I’ve seen a few CFA candidates post their detailed studying plans on forums and blogs. I love the initiative. It makes them accountable, gives them structure, etc. That being said, there are a few things that I’ve seen and have to be critical about.

I’ve seen some candidates trying to study late at night and early in the morning several months before the exam, cutting out sleep out of their lives. There are many problems with such a method. First off, it’s important to keep in mind that your time spent studying the last few weeks is several times more effective than whatever you could learn now. Sure, it might make you feel better to spend 20-30 hours studying while working full time. But the problem is that very few people can remain effective for several months while sleeping 5-6 hours or even less. I know there are exceptions but I’d argue that most of us need a bit more.

It’s All About That Last Month

If oyu know that you will need to study extra hard in that final month, that it will be the determining factor in passing or failing the exam and that time spend studying then, especially in your last 2 weeks will be the critical part, then why in the world would you do something that will likely make you feel exhausted before even starting.

Personally, in all 3 levels, the last month before the exam was very intense, and I would say that there are very few months in my life where I’ve slept less. The only thing competing with that was the birth of my first kid:) So anyway, I personally tried to always prepare my CFA exams with one thing in mind.

“It’s All About That Last Month”

That means clearing my schedule and having an amazing plan for that last month is critical. But as important is starting the month feeling fresh both physically and mentally. It’s not possible (for me at least) to study at that level for 3-4 straight months.. So I focus on what I can do in those previous ones to make sure that I can be 100% effective.