Week 11: Portfolio Management and Equity

With portfolio management nearly done, we have only got 30% of the curriculum left to cover in the 5 remaining weeks before we turn to the 6 weeks of question practice and revision for the test. If you have remained committed to the program week-in and week-out since the beginning, please fill out your week 10 progress report and congratulate yourself on your progress so far.

Before we turn to equity investments, we need to complete the final reading in Portfolio Management about Portfolio Planning and Portfolio Construction. The equity investments topic area is split in two study sessions, that are further subdivided into 6 readings (3 in each). This week we are only going to cover the first 2 readings in the first study session. The first reading contains a slightly long-winded introduction to market organization and structure (covering everything from the essential functions of the financial system to how trade orders are processed). The second reading covers security market indices (how they are constructed, defined and used).

The introductory reading about market organization & structure is clearly the biggest reading in the study session. Conversely the reading about security market indices is roughly half the length but contains roughly the same amount of end of chapter questions and LOS statements. There is no guarantee that the security market indices reading is going to have a relatively higher density of exam questions, but it probably won’t hurt to pay a little bit of extra attention when studying it.

We are going to apply our standard study approach to master this study session:

  • As always, please ensure that you write down and answer the LOS as you work your way through each reading. The combined effort of question practice and LOS statement “hunting” will ensure that you are focused on seeking out the most important information. Once you are done have a flick through the flashcards and make a note in your question log about those flashcards that you struggle to answer on your first attempt.
  • Please ensure that you attempt the end of chapter questions in the underlying curriculum as soon as you finish each reading. As you answer the questions make a list of the most difficult ones (especially whenever you resort to guessing). When you are done with the questions, review your answers thoroughly (particularly those that you got wrong) and add these questions to your list as well.
  • Lastly on the day after you have wrapped up each reading attempt only the challenging flashcards and end of chapter questions from your question log. Revise your answers and make a note of those flashcards and questions that you are still struggling with. Continue this process for as many days as required until you can confidently answer all. You can do this in parallel while beginning a new reading, just make sure you carve out a little bit of time each day to attempt the challenging questions and flashcards that you have not yet put to bed.

Once you are done with this weeks program please remember to fill out your week 11 progress report.

In week 12 we are completing Equity Investments.

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