I thought I would share my experience with anyone interested on how I passed the Level 1 Exam this past June on my first try. In addition, I achieved >70% across all categories so I feel I knew the material. See below for my “pearls of wisdom” and recognize that everyone starts from a different point based on background and experience.
My background: graduated with a MBA and a concentration in asset management. I took classes in financial statement analysis, accounting, statistics, fundamental analysis, portfolio management, economics, investments, derivatives and risk management and venture capital. I graduated top of my class (because I was willing to work harder than my peers). I have worked in the financial services industry for 11 years, and roughly 5 years of that in an investment decision-making role with my most recent role as an equity analyst for a RIA.
My experience: I initially began studying the first week of January with the intention to read all of the CFAI text. I began highlighting in book 1 and taking notes. I got bogged down in the material (despite spending significant amounts of time studying) and felt that the Quant Methods was incredibly boring and somewhat confusing. At the end of February (almost 2 months of work), I finally finished book 1 and began book 2 (Economics). At this point, I realized I would never finish in time. I reassessed my options and decided to order the Schweser text. I was able to complete all of the Schweser texts in about 2 months and was able to begin reviewing by early May. I spent the last month reviewing my formula sheets, redoing practice problems from various chapters and taking a few practice exams. I also took a review class with the Boston Security Analyst Society which I felt was excellent and helped reinforce information (particularly Fixed Income). My final 3 weeks of review were scattered at best as I felt like I had burned out, was balancing work/studying and a 5 month old baby, and truthfully had lost some drive. I spent my final day before the exam studying for a couple hours and then watched TV.
My secrets to passing:
1. Obtain the Schweser texts and use these as your primary source of material. After reading each chapter, do the problems and then skim through the CFAI corresponding chapter to make sure nothing is missed (only found a few discrepancies). Do the CFAI EOC questions as the CFA problems may test concepts differently. I thought this helped to reinforce concepts. I found this particularly true in some parts of equity analysis and portfolio management.
2. DO THE EOC PROBLEMS AT THE END OF EACH CHAPTER: I know I already said this but it is very important. It is not enough to just read the text.
3. Print a hard copy of your calendar covering your studying start date to the exam date. Count the number of pages you need to read in the Schweser text. Then divide this figure by the number of weeks you will study (leave 2-3 weeks to review). Now you have your weekly reading total. Then, mark on your calendar which days each week you will study and how many pages per day. This seems tedious but it gave me the confidence that I would finish in time and kept me on track. I focused on 1 hour before work, studying during my lunch, doing a few hours after work and then a 4 hour chunk each weekend day. DONT - AND I MEAN DONT - spend all weekend sitting inside. It will depress the crap out of you and you will burn out. Get outside, enjoy yourself, do things you love and don’t ignore your family and friends. If you stick to your schedule, you can balance everything.
4. I tried index cards and they didn’t work. Plus, by the end of each book, I had a stack of cards I couldn’t fit in my bag. Instead, I used blank pieces of paper and wrote pertinent formulas on them in a long list. I also found it was helpful to jot down pertinent terms. Once I completed a topic, I stapled them together. You will find that the same formulas appear throughout the books. Then, I reviewed these in my car on the drive to work in the AM while I was awake. Don’t leave memorization to the last minute – I found myself cramming a bit on these.
5. Don’t leave Ethics for the end! I was given this advice and ignored it. It is among the most important topics, and you are better reading it while you are fresh to the program vs. 3 months into studying. I found it required minimal review at the end. I also recommend reading the Ethics section in the CFA text vs. Schweser. I also used the CFA Handbook practice questions as a test.
6. Don’t get bogged down on material (particularly Quant) – you don’t need to be an expert on all that stuff. Given the number of questions you can be asked (per the weighting scheme on the CFA website), put that into context with the hundreds of formulas they throw at you in the Quant section alone. Some topics are obviously much more critical than others like TVM (because it reappears in FI , Equity, Corporate Finance). Be smart with your time! If you don’t understand and it doesn’t reappear frequently in practice questions, forget it. If it isn’t clear in Schweser, try reading the CFA text.
7. Take some form of review class! Look at your local CFA society as they all offer review courses for a reasonable sum of money. Paying for a Schweser review class seems a bit repetitive – it is much more helpful to get a different perspective. The key is to have all the reading done before the review as a true test of your knowledge.
8. UNDERSTAND THAT YOU CANT KNOW EVERYTHING!! This frustrated me but I finalized gave in. Some of the minutia you will be presented with is worthless. Nobody can remember all of the material. The key is to understand the key concepts.
9. Realize that your life will suck for 6 months. I pushed myself too hard and burned out late in the game. Stick to your study plan and you will be fine. Take a day or 2 off per week, but try to maintain consistency in your routine so material remains fresh.
10. Try to avoid reading the Analyst Forum daily. I found it stressed me out because 2 days after I began studying, people were posting that they were already done with the reading. It isn’t a race, and everyone learns differently. The test measures your ability to comprehend and apply the material.
I wish you luck in your studies. I passed the test while balancing work and my family so it can be done and I’m sure you can too if you put in the time and effort. It wasn’t easy but it was satisfying when I found out I passed.
The three columns on the right are marked with asterisks to indicate your performance on each topic area.
Multiple Choice Q# Topic Max Pts <=50% 51%-70% >70%
- Alternative Investments 8 - - *
- Corporate Finance 20 - - *
- Derivatives 12 - - *
- Economics 24 - - *
- Equity Investments 24 - - *
- Ethical & Professional Standards 36 - - *
- Financial Reporting & Analysis 48 - - *
- Fixed Income Investments 28 - - *
- Portfolio Management 12 - - *
- Quantitative Methods 28 - - *