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portfolio strategy

The man seated next to me with his head in his hands is what I remember most about taking the Canadian Securities Course exam.

Time had just been called and we were asked to turn our exam sheet face down on the desk. When the guy to my left did this, he noticed a final page of questions that he never got to. Thus came a moment of agony that will be familiar to many of the more than 370,000 people who have enrolled in the CSC since it was launched 50 years ago.

"It seems to be a course that for some people has been their nemesis," said Marie Muldowney, managing director of the Canadian Securities Institute, which administers the CSC and many other investment industry courses and designations. "But for a lot of people, it has been a stepping stone. There's a whole history of people who have gone through the brokerage industry and qualified with this course."

The CSC is a foundational course for people who work in the investment industry. But it also functions as an intensive boot camp for people who want to master the basics of the financial markets. Individuals who work in banking, corporate finance and investor relations take it, and so do everyday investors.

In fact, the institute now offers a CSC Investor version that, at $495, costs half the $985 price tag for the full course. You get all the study materials with the investor version of the course, but you don't take the exam and you don't get a certificate. Interest in this CSC-lite has been modest, Ms. Muldowney said. "People want the real thing. They want to be able to put the CSC on their CV."

I put it on my CV back in 1993, when I was a business reporter trying to add to my career options. The guy next to me in the exam was an employee at one of the big banks who was looking to buff up his own credentials. Fumbling the exam is not unusual. The Institute doesn't disclose the success rate, but Ms. Muldowney said "quite a few people" don't get the minimum 60-per-cent grade needed for a pass.

"The exam is designed to be tough but fair," she said. "You have to have read the material, you have to integrate it, you have to understand it, you have to be able to apply it and you have to know what you're talking about."

The CSC curriculum back in my day was covered in a single volume of 454 pages. Today, the course material has expanded enough to generate two volumes that offer the same overview of stocks, bonds and the economy that I recall, plus new material on investment products and portfolio building. "It's a comprehensive course that really covers the waterfront of financial services from the investment side," Ms. Muldowney said.

Individuals who want to build up their knowledge of investing and the markets have infinite amounts of information available online at no cost. What makes the CSC stand out is the high level of precision and focus it brings to all market-related matters. The language of the course material is as flat as ever, but it's generally comprehensible and practical.

For example, the section on developing an asset mix tells you exactly what cash, fixed income and equities are, and how they work together in portfolios to balance risk and returns. Rebalancing is explained, and examples provided on how to bring a portfolio back to its target mix of stocks and bonds. Exchange-traded funds, segregated funds and guaranteed minimum withdrawal benefits are among the products that are explained.

On the more technical side, the CSC covers all the various types of bonds (including how to calculate the yield of a bond) and stocks. There's also extensive coverage of the ratios used in analyzing stocks, and on reading corporate financial statements.

Is it worth spending almost $500 for the investor version of the course? For most people, no. A website such as Investopedia or (full disclosure: I do some paid blogging for this latter website) will offer more practical help, as will columns like this and others you'll find on But if you want a complete investing education, maybe because you plan to manage a large portfolio for yourself or relatives, it's worth considering.

One caveat is that the course offers a very traditional view of the investment industry, with little coverage of index investing. Mutual funds rate two chapters, while exchange-traded funds get a few pages. Behavioural investing, which attempts to reconcile human emotions with best investing practices, is not even mentioned in the index. The overall orientation is to address the needs of people selling investments, not buying them.

The CSC was launched in late 1964 as a training course for new hires in the brokerage business and attracted about 500 people in that inaugural year. Ms. Muldowney said between 12,000 and 15,000 now sign up for the course annually. Business is brisk enough that the CSC exam room in the Toronto headquarters on Wellington Street is constantly busy. Students in other cities can use local exam centres.

The course is offered on a self-study basis over one year, with online help available through webinars, discussion boards and practice questions. Where there was one exam and a few assignments when I took the CSC, today there are two two-hour exams of 100 multiple-choice questions each. A new addition to the CSC repertoire is the Refresh program, which is being marketed as a way for grads of previous years to demonstrate their commitment to keeping current on industry knowledge. The CSC Refresh includes a two-hour exam and costs $75.

Ms. Muldowney herself does not have a brokerage background and has not taken the CSC. "So far," she quickly adds, "I've got the two books on my desk."

Click here for some sample exam questions from the Canadian Securities Course.