Le CFA

Greetings and Happy Almost Friday!

As I mentioned in my 2012 Goals post last week, one of my goals for 2012 is to pass Level II of the CFA.  I have mentioned the CFA quite a bit on my blog, but I haven't really explained what it is, and since I get questions from time to time, I thought I'd do a post about it!

The Books

 

 
Those are the books.  I have 2 sets - the CFA Institute books on the left, and the Schweser supplemental materials on the right.  The supplemental books have "professor tips" in them that tell you what to focus on, but the main reason I get them is because they come with about 6 practice exams and an online program with tons of sample questions and case studies.

The Material & Study Schedule

The material is broken down into 9 main topics, and then further broken down into 18 study sessions, which are further broken down into readings.  The 9 main topics covered are Ethical & Professional Standards, Quantitative Methods, Economics, Financial Statement Analysis, Corporate Finance, Equity & Alternative Investments, Fixed Income, Derivatives, and Portfolio Management.

It's far from easy (see above equation, that's an example of one of the equations I studied this week).  But it's doable, with hard work and dedication.  I have had to let go of my expectations for how fast I will get through the material - it's painstakingly slow to get through some of it - for instance, on Monday I spent 5.5 hours going through a 48 page reading and the 30-40 associated problems...  I feel like I could possibly read a BOOK in 5.5  hours.  I usually try to study 3-4 week nights for 1-2 hours, and then 4-6 hours on Saturday and Sunday.  They CFA Institute recommends 15-20 hours/week, and that is about what I average each week. It's grueling as I will follow that study schedule from now until I take the test on June 2nd.  But at least I am studying during the least desirable weather conditions in Minnesota - studying in the summer or fall would be WAY WORSE. 

My Outlook 

Last year, I did not handle the stress of studying well - AT ALL.  I was really down and depressed, because a) it was extremely isolating to spend so much time in my condo alone, studying, and b) I felt like there was a strong chance I wouldn't pass because I struggled to retain information as I progressed through the material.


This year will be better.  It has to be.  It will help that I now live in an area where I can walk to the library or a coffee shop if I need to be around people.  My goal is to study at the library on the weekends as the change of scenery will be good for me, I think.  On days when I do study at home, I can play the piano when I need a study break, which will make a huge difference.  It will also help that I don't have an hour long commute home - instead I have a 20 minute walk, which means I'll have plenty of time to get a work out in and start studying by 6:30.  And last, but not least, I will have the confidence of passing the Level I to draw from when I start to get discouraged.

I'm nervous for level II as the format will be different from level I.  The pass rate is just as low as level I (36-40% pass, on average)  It features case studies with multiple choice questions instead of individual MC questions like level I.  There are half as many questions, so each one counts more.  The material is more difficult.  But I will work as hard as I can and hopefully, come July, I'll be celebrating another pass! 

The CFA program is BY FAR the most difficult thing I've ever committed myself to. But it's my CHOICE to do this - no one is forcing me; I am going to keep that in mind when I feel tempted to complain about it.  It's really important to my career and when it's all said & done, it will be so worth all the time and effort I'm putting into it. 

What is the hardest thing you've ever committed yourself to?