High School Scholarship

January 13, 2015

As I noted in this post, I made a personal pledge to “give back” all money I received in the form of scholarships and a fellowship while in university.  In the picture below, I am with three of the 2014 scholarship recipients from Botwood Collegiate.

Fred_Penney_Scholarships

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In a September 10, 2014 article on ETF.com, Larry Swedroe blasted tactical asset allocation funds stating that “TAA is just another game where the winners are the product purveyors, not the investors”. Swedroe bases his article on TAA funds listed on Morningstar’s site. According to Swedroe, Morningstar found that 70% of the TAA funds that were at least one year old had worse performance than the passively managed Vanguard Balanced Index Fund (VBINX). VBINX invests in a roughly 60/40 mix of US stocks and bonds. The point being that investors should choose VBINX over tactical asset allocation funds.

My Pure Momentum trading system and Meb Faber’s fund are only two months old but out of curiosity I compared their performance against VBINX.

Tactical Asset AllocationSo far, so good but two months is much too short a timeframe to make any meaningful conclusion.

I have backtested my trading system starting on July 30, 2014 so I compared the backtested performance of my system against VBINX.

TAA and VBINXNeedless to say, I’ll stick with my trading system!

Although Swedroe notes that a number of TAA funds failed to deliver the goods, DIY investors can easily find and implement many simple TAA models that will handily beat VBINX with the use of low cost ETF’s.

@fjpenney

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My ETF momentum system which I run on Collective2 had a solid performance in December gaining 1.3% compared to a flat performance by my benchmark (Cambria Global Momentum which is one of Meb Faber’s ETF’s).

ETF Momentum

In the chart above, I show the gain (loss so far) that I would have incurred had I purchased equal dollar amounts of all the ETF’s in the basket that I select from. If the gain on a purchase of all the ETF’s was very close to the gain generated by my model then there would be little evidence that my trading system offers any value. The time period of two months is very short but the difference ($3,360 loss versus a $3,171 gain) is huge. So far, my Pure Momentum trading system has provided a very good return.

My Pure Momentum ETF trading system holds up to five ETF’s and trades only once per month. Therefore, it may be a good model for anyone who wants to be a DIY investor and wants to trade minimally using an ETF trading system which is based on research spanning decades.

@fjpenney

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When I attended university way back in the 80’s and 90’s, I was the recipient of many scholarships in both the Bachelor of Engineering and Master of Business Administration programs. Additionally, I received a fellowship from Memorial University of Newfoundland for the entire time I worked towards an MBA degree. I can recall that at some point I thought it was incredible that so many organizations and businesses plus our provincial government and the university were so helpful to me at a time when I needed academic funding. While in the MBA program, I made a pledge to myself to give back the money to other students if and when I was financially able to do so.

While making a presentation at a local high school in 2004 for our business, I decided to take the plunge and make a commitment. I asked the principal if I could make an announcement while on stage and his response was “Fill your boots!”. I told the group of students and teachers about the scholarships and fellowship that I received and I was about to start giving back the money. I didn’t know what form the first scholarship or award would take so I asked the teachers to provide suggestions. The first teacher to approach me asked if I would provide financial aid to high school students in the leadership course. As I understand it, teachers at Exploits Valley High designed the first leadership course which has since spread throughout high schools in the province and has high enrolment. Each year, students attend a provincial leadership conference and they could use funding to go towards the travel, accommodations, etc. Thus was borne the first award that I sponsored.

Thank You

Several years later, the principal at EVH called me in and asked if I would provide funding for one of the two Student of the Year awards presented annually at the graduation awards ceremony in June. I agreed to do it.

In 2009, I contacted the principal at Botwood Collegiate and advised him that I was willing to fund an award or scholarship. A few days later he called me and suggested that I fund awards for the three students with the highest marks in Level 2 (Grade 11). Done.

The fourth award that I funded was for a Level 3 (Grade 12) student at Mealey Mountain Collegiate in Happy Valley-Goose Bay. The guidance councillor thought a great award would be for a student who was a very hard worker, contributed to school events, may have a part time job and didn’t receive a scholarship or award typically because he/she didn’t have sufficiently high marks. I agreed and we called it the Perseverance Award.

Last night when I addressed the students and parents at Botwood Collegiate, I realized that I didn’t know the total amount of scholarships and awards I have funded thus far.  I am pleased to say that I have personally funded a total of $26,000 in awards for high school students. As I intend to “give back” the total dollar value of scholarships and the fellowship that I received, I will continue to fund these awards into the future.

In addition to my goal of giving back the funding I received, I have a second goal which is to see current students take my place on the stage in the future. Perhaps in fifteen years from now students who received one of my awards will start to give back the money they received in the form of scholarships and the cycle will continue.

@fjpenney

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