CFA designation - What's it good for?

Discussion in 'Professional Trading' started by FortuneSmiles, Mar 10, 2006.

  1. I really want to be a money manager/portfolio manager/daytrader/positiontrader/etc...

    I have a BA degree in mathematics from a good school in Costa Rica. I have never taken a finance course in my life and know nothing about financial statements or any of that. I have done a little trading but feel the need to learn more about the financial markets so I can make decisions like Fund managers do (i.e. get x% long oil y% short dollar/yen z% cash....etc...). Up to this time, I have only daytraded single securities at a time. I know nothing about portfolio management whatsoever. I have never been long or short multiple securities at the same time. I want to learn how to make decisions regarding portfolio management. I want to be analyze current state of affairs in the world and make portfolio decisions based on what is observed. I don't know where to start. I don't know how to go about doing this.

    Rather than do an MBA, I was thinking about pursuing my CFA. It's cheaper than an MBA, and seems to be a respected designation in the Mutual Fund/Hedge Fund/Money Management world. Unless, I have been misled. If anyone out there knows differently, please post your comments here.

    Do big firms like Goldman Sachs/Bear Stearns/CHASE/Lehman Brothers look favorably upon candidates who have passed all three levels of the CFA? If I have a BA and the CFA designation will I be able to compete against people who have BA and MBA? I am talking, specifically, about hedge fund, mutual fund, and money management / investment positions.

    I will be very happy to hear responses from anyone with an opinion on this topic.

    However, I am particularly interested in responses from people who possess the CFA designation (or have passed x number of the three CFA levels), people that are in managerial positions at top banks/hedge funds/mutual funds and that have experience with hiring CFAs or MBAs. Or, if you work in a hedge fund or mutual fund and can tell me what you've seen as far as the people that you work with (i.e. how many of them have CFAs, to what exent is the CFA respected in your organization, and etc...). Thanks so much for your help.

    I will post another message about the CFA on this forum asking for a list of names of famous (rich) investors who have the CFA designation. Thanks again
  2. first, money manager/portfolio manager/daytrader/positiontrader all all very different things.

    so to narrow it down, i'll tell you what a CFA designation is good for. it is good for mutual funds, fundamental hedge funds and equity research.

    i passed level 1, failed level 2 (debating on whether to take it again). i'm finishing my mba in june.

    it is prestigious, but it is increasingly less so, becuase it is more "old school".

    big firms like it because it shows that you are committed to changing your career (it takes 3 years minimum to complete!)

    if you have a cfa designation, you will be able to compete with ba + mba ONLY in equity research positions.

    first, you have to find out what a port manager actually does. then you should ask again, because it is obvious that you don't know how the industry is structured, and being a port manager might not be what you are actually looking for.

    and i might add, you have to get work experience in the industry. if you don't have work experience in the industry, getting a cfa in the hopes of getting a finance job is less certian then if you got an mba. because in business school it is expected that you are changing careers. getting a cfa is getting a professional certification... but you don't have expereince so that certification means less.
  3. Portfolio managers are money managers and most certainly must engage in position trading and, perhaps to a lesser extent, daytrading. It is that connection between those positions that has led me to group them together.

    You said "fundamental hedge funds". Does this imply that there are hedge funds out there that ignore fundamentals and make decisions on technical bases primarily? I never knew that. Technical analysis by itself, I've always thought, is very weak.

    It's funny you say that the CFA is primarily good for equity research positions. Equities are one of my least favorite securities. I have experience trading corporate bonds on an intraday basis. I like the debt market much better than equities.

    Why would you decide not to complete the second level of the CFA? you are 1/3s of the way there to the CFA designation. Is it that difficult?

    Let's say you pass all three CFA tests and you do not have the three years of work experience. Would firms still look at your application favorably given the fact that you passed all three exams? I wonder if bond research positions would be open to people who pass all three CFA exams with no experience. You said equity research. Unfortunately, I'm not a big fan of equities (perhaps that needs to

    I don't want to manage money of individual client assets (maybe that's what a portfolio manager actually does). Rather, I would like to manage the money of a fund the assets of which are derived from multiple clients (i.e. like a hedge fund).

    Finally, have you learned enough from the CFA course of study to be able to say that the CFA is worth pursuing in and of itself? Would you say you are more worldly in your investment knowledge after having gone through the first step of the CFA?

    Thanks so much for your input. Very much appreciated

  4. CAX49


    It helps...not sure it is worth all the time.

    you can get a nice six figures salary with experience and a CFA - but if you are trying to manage a hedge fund you are better off researching a trading strategy that can return more then 10% a year instead of studying about compounding interest and ethical practices.
  5. Domnic


    My gf got a degree in econ, worked for prudential out of college focusing on asset allocation w/ a 63 and 65, relocated to chicago and got a job w/ an online firm where she got her 7.

    After getting laid off when the bubble burst and order flow was down she took the first job that came her way as an ira clerk in the back office of an independent b/d. After sitting there for 3 years w/o any growth opportunity, she began her mba program, switched firms, got her 4 and 24, completed her mba program and is starting the cfa in 6 months.

    Some people get handed opportunity. Regular people like my gf and me get handed crap. For my gf a cfa cert. is a necessity. She won't get handed anything, not in this industry. I work in the industry too and have seen first hand how her work ethic, knowledge, and experience are completely disregarded. A cfa will make you a better professional which will get you the job you want which will get you to where you want to get...atleast in my gf's case. She wants to be an equity analyst.
  6. The CFA in invaluable in emerging markets because employers don't want to try and weigh your education (in Costa Rica ??). The CFA is a recognized credential and is emminently portable into emerging markets. It is also a big step up when you are first trying to get in the door. Even having started the program is important.

    Of course it is also valuable in the global financial centers as well...

    One of the aspects of maintaining the CFA that practioners find valuable and that outsiders overlook is the rigid code of conduct. To be succinct, if you breach any laws, regulations, codes or ethical standards (and get caught), you lose your CFA. The program also includes a rigorous 'ethics' body of material. As such, employers see the CFA as a sort of 'Good Housekeeping Stamp of Approval' that you are clean, i.e. they need to worry less about any skeletons you might be carrying around from previous experience.
  7. The CFA seems to be a prerequisite to being considered for a lot of investment management positions. In my opinion, the primary value of the CFA is the perception of the designation by others. If you're planning on going into investment management, I believe it carries more weight than an MBA, especially if your MBA came from a 2nd-tier business school (any school other than Harvard, Kellogg, Wharton, Stanford, etc.).
  8. I wonder just how difficult it would be for someone who does not speak good english and who never took a finance course in his/her life (like me). Would it be possible for me to pass it in June if I spend a lot of time studying from now or is there just too much material? Thanks
  9. CAIA designation is the way to go in the hedge fund world.
  10. First you'll have to nail down what exactly do you want. A daytrader is not remotely similar to a portfolio manager....
    If you just want to be a 'player' like Gordy Gecco said it in a movie, I say fergetaboutit and learn to make money for yourself the hard way.
    Sorry kid - you either want pleasantries or the truth?
    It is not easy getting jobs in Finance/trading...there will be lot of companies that will imply a job but you'll find out that most are come-ons (prop trader deals) and commission sales jobs (not that there is anything wrong with that)...but not everyone can do those....
    #10     Mar 13, 2006