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How to prepare an effective CFA® study plan

To be successful, it’s highly recommended you have an effective plan of action to master the concepts and be as ready as possible for exam day. These tips can help you prepare your own study plan.

This blog post has been updated and was originally authored by Kaplan Schweser.

The CFA® exam encompasses three separate exams that each cover a lot of material. To be successful, it’s highly recommended you have an effective plan of action to master the concepts and be as ready as possible for exam day. These tips can help you prepare your own study plan.

Start early and be consistent

The CFA Institute recommends 300 hours of study, which is usually the minimum requirement most people need to be successful. In order to dedicate that many hours over six to nine months, you’ll need to put in the time and effort every week. It’s important not to cram everything into the last few months before the exam. Starting late and cramming is a recipe for failure.

Stick to your schedule and don’t fall behind

Once you create your study plan, be disciplined and stick to it. To build the motivation you need to stay on track, you can take a CFA exam review course and prepare for it like you would for a university or online course. This can include reading the relevant material ahead of time to get a better idea of the topics to be covered and writing down any questions you want to ask. Another great way to stick to your plan is to form a study group and meet on a regular basis. Studying with others who are facing the same challenge as you is valuable for motivation and support. In addition, being able to ask questions or explain a concept to someone else helps develop your own mastery of the topics. Build the class and study group meeting times into your schedule and, once again, stick to it!

Prepare, Practice, Perform

A very useful organising structure for your plan is based on the three key stages of learning: Prepare > Practice > Perform®. The path to success is to focus on the Learning Outcome Statements (LOS) provided by CFA Institute. These are performance-based objectives that provide detail on what you’re expected to be able to do on exam day. For example, one LOS might be ‘calculate and interpret Net Present Value (NPV).’ The command words ‘calculate’ and ‘interpret’ are what you should be able to do correctly.

1. The Prepare stage is when you begin to learn the basic concepts. This can be accomplished through reading, listening or attending lectures. This stage is mostly a passive exercise of absorbing information and examples of vocabulary, theory concepts and principles related to the LOS. In essence, the prepare stage gets you ready for the next vital stage. Before you learn how to calculate NPV, you need to know what it is and what tools you need to calculate it.

2. The second stage is Practice. This is when you actually apply the knowledge from the Prepare stage by working practice problems. If you’re supposed to calculate NPV, the best way to learn how to do this is by completing 10 practice problems that ask you to do just that. Candidates can often spend too much time preparing and not enough time practising.

3. The third stage is Perform. This is when you simulate actual exam conditions by taking a mock exam, assessing your performance, identifying your strengths and weaknesses, and going back to do more practice where you think you need it.

As you develop your calendar, it’s recommended you plan to spend 30-40% of your time preparing, 40-50% practising and 20% performing.

Review regularly

The material you learn when you start your CFA study won’t stay with you until exam day. It’s recommended you go back and revisit this information frequently. Plan to spend a few hours each week reviewing material you think you’ve already mastered. Complete some practice questions and if you make any mistakes, review those concepts again until you know them.

Cover all the material

Don’t play the prediction game by trying to guess which LOS won’t be tested and then ignore studying this material. Every LOS is fair game for the exam so be ready to be tested for anything.

Start and end with ethics

In general, it’s recommended you study all topics in the order presented in the CFA curriculum. However, spend a little time on ethics at the beginning to get a big picture overview, then really hit the topic hard in the weeks leading up to the exam.

Reserve the last month for perform

In the month before the exam, begin to take practice and mock exams in realistic settings. Take the exam on your own with no notes and block off at least two hours and 15 minutes to simulate one session. The key is to use these exams to identify how prepared you are by assessing your areas of weakness and addressing them. If you get a question wrong, note whether the issue was application of your knowledge to the question, or a fundamental lack of understanding of the concept. Keep track of your scores and look for an upward trend. By exam day you should be consistently scoring above 70%.

And finally, reward yourself

Make a plan to do something fun and relaxing on the day after the exam … you’ve earned it!

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