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8 CFA Candidate Mistakes You Could Be Making
 

300 Hours's picture
O
(Orangutan, 339
 
Points)
 on 6/26/12 at 3:00pm
cfa frustration.jpeg

If you're waiting for your results, in case you haven't heard, they're out on the 24th of July (Level I & II) and 7th August (Level III). But if you're sitting for the December exam, hopefully you've already started your first study session - you still have a decent lead time to exam day, this is prime time to start. 

Here are 8 serious mistakes that CFA candidates tend to make - mainly aimed at Level I candidates but candidates at subsequent levels can be guilty of these as well.

Mistake #1 - Starting prep too late. 
Most common among Level I candidates, this is mainly due to underestimating the amount of work needed. Too often I see candidates leaving it till the last month to get started. It's not that it's not possible - it's perfectly possible to start with one month to go and pass Level I. However it either requires a fairly good grounding in finance either by education or work experience or having a very well-advised study plan.

Mistake #2 - Studying too slowly.
When going through the topics, pacing is important. Whenever you start, you should be aiming to complete your first read through the entire syllabus by the time you're halfway towards the exam date. A common fault is spending too much time with through and detailed note-taking - there is nothing wrong with being thorough but spending adequate time in all areas is essential. If not you'll find yourself having a very good grounding on your early topics and a rushed, sloppy understanding of others without enough practice questions under your belt.

Mistake #3 - Skipping topics.
When either pressed for time or struggling to understand certain concepts, many candidates are tempted to just skip the topic altogether and hope it doesn't get too focused on during the exam. This is a mistake for 2 reasons. 

  1. You're quite likely to get a fair weighting in Level I due to the volume of questions in the exam (so actually you're safest with topic-skipping in Level I from that perspective), but in Levels II and III you can get stuck with a full item-set focusing on a particular concept. If that happens to be a topic you skipped, then woe is you. Woe to the max.
  2. As mentioned in the previous point it's safest to skip topics in Level I. However I still strongly discourage it as Level I lays the foundation for Level II and III. You need a good understanding of all topics in Level I or your topic-skipping problems will be compounded in the subsequent levels.

Mistake #4 - Not enough practice exams.
Some candidates I know have gone into the exam hall having only managed to do 1 or 2 practice exams. As I have covered before, a significant focus of your preparation should be spent on practice exams. You need to understand the format, type and number of questions you're up against in order to properly prepare against actual exam questions. I recommend a minimum of 4 practice exams before exam day - well-prepared candidates should be doing 5-6 at least.

Mistake #5 - Not acclimatizing to CFA Institute questions.
Also essential to prep is ensuring you have a good idea of exactly how the tone and focus of questions set by CFA Institute will be like. This means you need to mix in practice questions obtained from CFA Institute - not just your study provider. With exam registration you already get the end-of-chapter (EOC) questions at the end of each reading in the CFA Institute curriculum, as well as 1 mock exam. Utilize them well - get a feel for how CFA Institute questions are like early in your prep process.

Mistake #6 - Not preparing for the actual day.
After months of studying, many candidates in all levels proceed to screw it all up by not preparing logistically for exam day. Do take some time as the exam day approaches to get a full list of exactly what to bring, figure out transportation and make sure you arrive early. Failure to adequately prepare for any of these can have catastrophic consequences on your exam performance.

Mistake #7 - Not managing exam time properly.
In every level, time-management is different. Candidates underestimate the volume of questions in Level I, the item-set format in Level II and the essay section in Level III. In each case this leads to candidates thinking they have more time than they actually will have, leading to hurried responses towards the end of the exam. Manage your exam time carefully - I cover this across all levels in more detail in the Resources section.

Mistake #8 - Getting your exam invalidated.
Perhaps the easiest mistake to make (and the most devastating!) is to give a reason for a proctor to report suspicious behavior on your part during the exam. Looking around, speaking before, after and during the exams, writing after the exam has ended and writing on your exam ticket are common examples. This will raise a disciplinary case with the Professional Conduct Program (PCP) and if found that you had the appearance of cheating (note that you needn't be found cheating, just having the appearance of doing so), your exam is invalidated and you may further receive a ban from taking the exam for several years. The CFA Institute is prosecutor and judge on this - their word is final. Proctor strictness varies across test centres, but be on the safe side and don't give them a reason to report you.

What other mistakes have you seen or made? Let me know!

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Comments

Flake's picture

Helpful. Thanks.

ER
(Neanderthal, 3,574
 
Points)
 on 6/26/12 at 2:41pm

Helpful. Thanks.

Under my tutelage, you will grow from boys to men. From men into gladiators. And from gladiators into SWANSONS.

Oreos's picture

300 Hours: .Mistake #5 -

HF
(Neanderthal, 2,450
 
Points)
 on 6/26/12 at 3:18pm
300 Hours:

.Mistake #5 - Not acclimatizing to CFA Institute questions.Also essential to prep is ensuring you have a good idea of exactly how the tone and focus of questions set by CFA Institute will be like. This means you need to mix in practice questions obtained from CFA Institute - not just your study provider. With exam registration you already get the end-of-chapter (EOC) questions at the end of each reading in the CFA Institute curriculum, as well as 1 mock exam. Utilize them well - get a feel for how CFA Institute questions are like early in your prep process

i would say that this is the hardest part. There aren't too many CFAI exams out there and I would go so far as to say they aren't a fair rep of the real exam anyway.

shark-monkey's picture

Couple more hints for

HF
 
Points)
 on 6/26/12 at 3:40pm

Couple more hints for studying

In schweser, the formulas in the back of each book. Rip these out and copy them so you can memorize, that way you don't have to write them down as you go since the end of chapter review in the book or on the quick sheet can leave these a bit incomplete.

Fear is the greatest motivator. Motivation is what it takes to find profit.

MrMonkey's picture

Very practical points. In

ST
 
Points)
 on 6/26/12 at 3:45pm

Very practical points. In addition to it, I think the biggest mistake is not knowing why you are taking CFA.

Moneyball's picture

Haha, I agree with MrMonkey,

ER
 
Points)
 on 6/26/12 at 3:49pm

Haha, I agree with MrMonkey, I have friends who are taking the CFA who aren't even remotely working towards a career in investment management. After taking level II, I feel that people should be warned about whether they really need or should take the CFA. It's takes an incredible amount of commitment of your time. If you're not going to be analyzing stocks, then DON'T TAKE IT.

Moneyball
See my other WSO blog posts

Oreos's picture

shark-monkey: Couple more

HF
(Neanderthal, 2,450
 
Points)
 on 6/26/12 at 3:59pm
shark-monkey:

Couple more hints for studying

In schweser, the formulas in the back of each book. Rip these out and copy them so you can memorize, that way you don't have to write them down as you go since the end of chapter review in the book or on the quick sheet can leave these a bit incomplete.

This is poor advice, don't follow. Writing the formulas as you go will greatly help your understanding and allow you to annotate while fresh. In addition Schweser end notes will often miss or be unclear with regard to subscripts etc...just be organized.

Tolland15's picture

funkee monkee: If you're not

O
(Baboon, 150
 
Points)
 on 6/26/12 at 4:07pm
funkee monkee:

If you're not going to be analyzing stocks, then DON'T TAKE IT.

It's true you should know why you're taking it, but analyzing stocks is by no means the only thing you can do with the CFA. The truth is that AM is probably the only profession out there whose partners will require you to have the designation before giving you a job, which might be what you're referring to.....But there isn't a level of the CFA that isn't pertinent to at least one aspect of finance. Lot of IB concepts in L2 and 3, more fixed income than anyone wants to deal with, corporate finance (not too in depth, but real options analysis, etc....more than you'll learn undergrad), a lot of derivatives in upper levels (trading, risk analysis), VaR and CaR (risk analysis)...... basically, you've never sat for the exam if you think investment management is all you'll do with it. There are people in every profession with the designation, or at least a few levels. If two people are equally qualified for an upper level position, and one has CFA next to their name....take a guess who's getting the job. Might even be more impressive if you aren't in IM because it shows you give more than a few fucks about being fucking awesome.

I was taught that the human brain was the crowning glory of evolution so far, but I think it's a very poor scheme for survival.

sambotanman's picture

dont study too slow that you

 
Points)
 on 6/26/12 at 4:10pm

dont study too slow that you can't cover all the topics and not too fast that you dont understand it. Great article! :) 10 out of 10

Amphipathic's picture

Strongly disagree, practice

 
Points)
 on 6/26/12 at 4:50pm

Strongly disagree, practice exams will not do much for folks talking L1 because it only tests your knowledge of a bunch of trivia. Did you take practice exams for your college classes? I doubt it, because its all about memorizing a ton of formulas, rules, and facts, and then spitting them back out for exam day. There is really no application of the material that you learn in L1. Spend that time brute force memorizing. L2 and L3, which are all about applying the knowledge you have learned, require a ton of practice exams to get comfortable.

Oreos's picture

Amphipathic: Strongly

HF
(Neanderthal, 2,450
 
Points)
 on 6/26/12 at 4:51pm
Amphipathic:

Strongly disagree, practice exams will not do much for folks talking L1 because it only tests your knowledge of a bunch of trivia. Did you take practice exams for your college classes? I doubt it, because its all about memorizing a ton of formulas, rules, and facts, and then spitting them back out for exam day. There is really no application of the material that you learn in L1. Spend that time brute force memorizing. .

and practice Qs are a splendid way to memorize facts / cement your knowledge.

Spalding Get Your Foot Off the Boat's picture

Oreos: shark-monkey: Couple

 
Points)
 on 6/26/12 at 5:00pm
Oreos:
shark-monkey:

Couple more hints for studying

In schweser, the formulas in the back of each book. Rip these out and copy them so you can memorize, that way you don't have to write them down as you go since the end of chapter review in the book or on the quick sheet can leave these a bit incomplete.

This is poor advice, don't follow. Writing the formulas as you go will greatly help your understanding and allow you to annotate while fresh. In addition Schweser end notes will often miss or be unclear with regard to subscripts etc...just be organized.

+1

Amphipathic's picture

Oreos: Amphipathic: Strongl

 
Points)
 on 6/26/12 at 5:09pm
Oreos:
Amphipathic:

Strongly disagree, practice exams will not do much for folks talking L1 because it only tests your knowledge of a bunch of trivia. Did you take practice exams for your college classes? I doubt it, because its all about memorizing a ton of formulas, rules, and facts, and then spitting them back out for exam day. There is really no application of the material that you learn in L1. Spend that time brute force memorizing. .

and practice Qs are a splendid way to memorize facts / cement your knowledge.

If you had access to actual past CFA exam questions, then sure. But the sutdy provider practice questions like those in qbank appear very different than the real thing

Oreos's picture

Amphipathic: Oreos: Amphi

HF
(Neanderthal, 2,450
 
Points)
 on 6/26/12 at 5:16pm
Amphipathic:
Oreos:
Amphipathic:

Strongly disagree, practice exams will not do much for folks talking L1 because it only tests your knowledge of a bunch of trivia. Did you take practice exams for your college classes? I doubt it, because its all about memorizing a ton of formulas, rules, and facts, and then spitting them back out for exam day. There is really no application of the material that you learn in L1. Spend that time brute force memorizing. .

and practice Qs are a splendid way to memorize facts / cement your knowledge.

If you had access to actual past CFA exam questions, then sure. But the sutdy provider practice questions like those in qbank appear very different than the real thing

you're missing the point. this isn't in aid of practice exam technique (and so the presentation / syntax of the question is irrelevant) this is as a memorizing exercise / aid

Amphipathic's picture

Oreos: Amphipathic: Oreos

 
Points)
 on 6/26/12 at 5:19pm
Oreos:
Amphipathic:
Oreos:
Amphipathic:

Strongly disagree, practice exams will not do much for folks talking L1 because it only tests your knowledge of a bunch of trivia. Did you take practice exams for your college classes? I doubt it, because its all about memorizing a ton of formulas, rules, and facts, and then spitting them back out for exam day. There is really no application of the material that you learn in L1. Spend that time brute force memorizing. .

and practice Qs are a splendid way to memorize facts / cement your knowledge.

If you had access to actual past CFA exam questions, then sure. But the sutdy provider practice questions like those in qbank appear very different than the real thing

you're missing the point. this isn't in aid of practice exam technique (and so the presentation / syntax of the question is irrelevant) this is as a memorizing exercise / aid

Okay, I don't feel that it is the most effective way to jam and keep material in my brain, but perhaps that is just me.

Moneyball's picture

Tolland15: funkee monkee:

ER
 
Points)
 on 6/26/12 at 5:36pm
Tolland15:
funkee monkee:

If you're not going to be analyzing stocks, then DON'T TAKE IT.

It's true you should know why you're taking it, but analyzing stocks is by no means the only thing you can do with the CFA. The truth is that AM is probably the only profession out there whose partners will require you to have the designation before giving you a job, which might be what you're referring to.....But there isn't a level of the CFA that isn't pertinent to at least one aspect of finance. Lot of IB concepts in L2 and 3, more fixed income than anyone wants to deal with, corporate finance (not too in depth, but real options analysis, etc....more than you'll learn undergrad), a lot of derivatives in upper levels (trading, risk analysis), VaR and CaR (risk analysis)...... basically, you've never sat for the exam if you think investment management is all you'll do with it. There are people in every profession with the designation, or at least a few levels. If two people are equally qualified for an upper level position, and one has CFA next to their name....take a guess who's getting the job. Might even be more impressive if you aren't in IM because it shows you give more than a few fucks about being fucking awesome.

Yea, I apologize. I was being a little too general with my comment. I guess I was being a little resentful because I saw some of my friends waste tremendous amounts of time studying for it, only to realize that it wasn't really necessary for what they were pursuing. As for IB, I feel like a lot of students spends way more time on the CFA than actually going out there and network and getting internships, including me. I was reading Mergers and Inquisition, and they even say that it's not entirely necessary and most bankers don't even have it. Depends how you see it I guess.

Moneyball
See my other WSO blog posts

Tolland15's picture

funkee

O
(Baboon, 150
 
Points)
 on 6/26/12 at 5:54pm

I was taught that the human brain was the crowning glory of evolution so far, but I think it's a very poor scheme for survival.

MSFhopeful's picture

Mistake #9 Improper use of

(Baboon, 139
 
Points)
 on 6/26/12 at 5:54pm

"The only point in making money is so you can tell some big shot where to go.”
-Bogie

300 Hours's picture

funkee

O
(Orangutan, 339
 
Points)
 on 6/26/12 at 5:55pm

CFA Blog - 300hours.com | Twitter | Facebook

See my other WSO posts

300 Hours's picture

Oreos: 300 Hours: .Mistake

O
(Orangutan, 339
 
Points)
 on 6/27/12 at 4:04am

CFA Blog - 300hours.com | Twitter | Facebook

See my other WSO posts

Oreos's picture

300 Hours: Oreos: 300

HF
(Neanderthal, 2,450
 
Points)
 on 6/27/12 at 5:09am
300 Hours's picture

Oreos: I'm going to have to

O
(Orangutan, 339
 
Points)
 on 6/27/12 at 7:09am

CFA Blog - 300hours.com | Twitter | Facebook

See my other WSO posts

BeastMode's picture

I think doing one or two

AM
(Baboon, 163
 
Points)
 on 6/28/12 at 6:20pm

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