Most useful concepts in CFA

Dear CFA Charterholders in the forum,

I’m currently preparing the Level 1 for Feb after have been cancelled twice due to COVID-19, so I guess I need a bit of motivation/perspective.

May I ask you which concepts learned during your CFA preparation do you think have been the most useful ones for you/your career? And which ones the most unuseful?


Personally, I felt the valuation concepts were the most useful for me. That will provide you with a foundation for just about any area of finance.

Most useful: ethics. I’m shocked at how many unethical people I continue to encounter on a regular basis. Also, portfolio management. I work as a portfolio manager and asset allocator and you’d be surprised at how often investment professionals lose sight of the forest through the trees. Particularly security analysts.

Least useful: specialized accounting topics. Like pension accounting doesn’t make much economic sense and continually undergoes change so difficult to master if not actively involved in the craft. Inter-company accounting and capitalizing operating leases (before GAAP rules changed requiring capitalization I believe). And derivatives, although this is a subjective response. My first job out of college was spent on a derivatives structuring desk managing overlay portfolios for institutional clients. I also studied derivative pricing extensively while completing a MBA at Booth. The CFA curriculums’ treatment of derivative pricing is pretty amateur from a practitioner’s perspective.

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Financial reporting in general is pretty practical. Used widely in business, not just financial analysis. Could come into play in any number of other careers down the line.

Quant is useful for understanding a lot of stuff you’ll read about in the news, since stats is becoming a bigger and bigger part of the way politics and things like that are reported.