Five Tips for Dominating CAIA Exams
Study Smarter, Not Harder, for Less Stress
I have negotiated with Russell Jude of Edge Designations for my readers to get a 10 percent discount on his prep programs (CAIA, CFA, FRM, FDP). Use the FERG coupon code when making your order.
Recently, I passed the second (and final) exam in the CAIA program, after passing the Series 65 exam about a year ago. CAIA is the flagship designation of the Chartered Alternative Investment Analyst Association, and I recommend it for those looking beyond conventional stocks and bonds. CAIA, like the CFA, can also be an alternative to an MBA or MS in finance, depending on your objectives.
My road to the CAIA designation was not rosy, and it included skipping two exams altogether. No-shows are common—not to mention about a 50 percent failure rate per exam—so here are five tips I would give my younger self approaching the exams.
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1. Avoid studying for multiple exams simultaneously.
While there is crossover with the likes of the CFA, FRM, Series 65, etc, doubling or tripling will cannibalize your precious study time. Be patient with the process and resist the temptation to overreach. One step at a time will avoid unnecessary failures.
Further, each program has its own exam-question intricacies. How you are supposed to interpret or read exam questions is one of your chief challenges, in contrast to knowing the material, so combining different exams will interfere with your intuition.
2. Collaborate to resolve confusion.
Find study partners and/or lean on discussion forums and group chats to clarify the curriculum and hold yourself accountable. This is easier if you live in a financial center such as New York or Toronto, but there are online options. AnalystForum is relatively active and my recommended place for resolving confusion and getting vocational advice beyond the exams.
Edge Designations, if you go with a prep provider, has WhatsApp group chats and even direct access to the study director. When possible, do your own research to resolve your confusion. That will require you to think through the problem, so you will retain the lesson better. If both your research and the gentlemen at AnalystForum fail to provide clarity, having someone to call on is helpful as a last resort.
3. Distill the content.
Utilize a prep provider and/or tutor. Reading the full CAIA curriculum (more than 4,000 pages), albeit intellectually enriching and satisfying, is mission impossible for busy people. Further, by the time you read it all you will have forgotten much of the earlier content.
There are many competent prep providers, but I chose Russell Jude of Edge Designations. Now a friend of mine, he lives in South Africa and serves an international, price-conscious clientele. Largely a one-man band, he offers direct personal support, including live small-group lectures—in addition to his more affordable prices.
You can also hire me directly as a finance tutor. I have been tutoring economics and finance for many years and love to review the material. Please have questions ready so that we can get right to work and use the time productively. Notes in your booking regarding areas of concern will also allow me to refresh and have practice questions ready.
Another affordable option, especially if you have failed and know your weak spots, is à la carte online courses. This applies more to the CFA, since it has many more students and instructors, but you can sometimes find chapter summaries and practice questions on websites such as Udemy.
If you do opt for the full curriculum, consider doing it with a partner and speed reading the chapters together—as I learned to do as an undergraduate. A study partner and I would divide up the chapters, speed read each one in about half an hour, and then teach our assigned chapters to our partner. This worked like a charm, and questions from our partner, requiring us to explain our assigned chapters, helped crystalize the content.
4. Know why you are studying.
Be aware of why you are doing the program and have compelling, explicit objectives. At some point, your motivation will almost certainly wane. Unless you are sure why you want to invest the time, you will struggle to justify the cost. Akin to the swath of doctoral students who abandon their studies, you will then leave a sunk cost. With a half-completed curriculum, you might have learned something, but you will have little way to signal that to prospective employers and clients.
Read the CAIA Portfolio for the Future blog and listen to the two CAIA podcast series. These will add color to the curriculum and help you to stay grounded regarding the purpose of your studies. I particularly enjoyed the interviews with the authors of the supplemental readings in the level-two curriculum.
I chose to go beyond consuming and wrote brief notes on Gab (@FergHodgson) about the words and insights I came across in my studies, typically with images and text screenshots. These boosted my learning, and often I went back to these to refresh my memory.
5. Integrate exam questions into readings.
This should be common sense, but if you do not do practice questions throughout the process, you will simply not be prepared. It is like lifting weights in the gym but never doing sport-specific drills. You might have strength, but it will not be ready to be applied on match day.
Such is the competitiveness of students targeting financial designations such as CAIA, the exam authors have to push the boundaries of students' understanding. Just knowing the material via reading and/or watching video summaries will not cut it. You need to be familiar with how the content will appear in questions, especially when you are dealing with so much jargon that has a specific meaning in the financial context.
Further, the practice questions will give you confidence with time management. The CAIA exams are extremely tight on time. You need to be able to work quickly and perhaps be willing to move on from a question, lest it eat away your minutes and end up being a guess anyway.
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Fergus Hodgson, CAIA, is director of Econ Americas and author of Financial Sovereignty for Canadians and The Latin America Red Pill. Book a personal consulting session with him and follow him on X, LinkedIn, and Telegram.