Travis R. Martin, CPA, MBA » Mutual Funds

Project Based Economics: The Vanguard Black Swan Fund Advertisement (Phase 2 Rollout)

travisrmartin — Wed, 18 Jan 2012 16:57:17 +0000

If you’re following along, and I know you have been, our History of Globalization class is in the middle of the Vanguard Black Swan Fund project. In the first part of the project, students researched and delivered a presentation on historical Black Swan events.

In phase 2, they will be creating a hypothetical Black Swan event, and assembling a mutual fund that will protect investors should their event occur.

I put together a short “commercial” advertising the Vanguard funds the students are creating. I used this as an entry document to introduce the second phase of the project, and draw everyone’s attention back to the project.

As part of the setup for Phase 2, we also shared the instructions, the rubric, and a sample prospectus – all of which are linked below.

Black Swan Fund Prospectus Rubric
Sample Prospectus
Prospectus Instructions

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Project Based Economics: The Vanguard Black Swan Fund (Part 4 – Group Check-Ins)

travisrmartin — Wed, 11 Jan 2012 15:16:33 +0000

Daily Agenda from echo

Phase 1 of the Black Swan Fund project is well underway. Last week we rolled out the project and had two workshops. The first workshop was a remediation workshop where we covered the concept of the Black Swan in a small group setting. In the second workshop, my co-teacher modeled a presentation covering the Black Plague.

This week, the groups are working on researching their Black Swan events and putting their presentations together.

In this stage of a project, it is important to make sure students are heading in the right direction and staying on task. One of the mechanisms for doing that is the group check-in. During group check-ins, we meet individually with each group to assess progress and provide support. These check-ins normally take about 5-10 minutes per group and they are used as part of a students’ Professionalism grade.

With presentations beginning tomorrow, I’ll provide the list of topics selected by the students as being “Black Swan” events. Should there be any exemplary presentations, I’ll post them as well.

BP Oil Spill
Bank runs preceding the Great Depression
9/11 Terrorist Attacks
Y2K Glitch (Some Black Swans are events that people expect to happen, but don’t occur)
Invention of Cotton Gin
Invention/Growth of Internet
Emancipation Proclamation
Martin Luther King’s “I Have a Dream Speech”
Assassination of Archduke Ferdinand
Invention of Automobile
Columbine School Shooting
Apollo 11 Launch
Stock Market Crash of 1929
Secession of South Carolina from Union
Declaration of Independence

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Project Based Economics: Vanguard Black Swan Fund (Part II – Project Rollout)

travisrmartin — Wed, 04 Jan 2012 20:36:17 +0000

In the last post, I introduced a new project being rolled out in our History of Globalization class. This project requires students to study historical Black Swan events and build a mutual fund to protect investors against a hypothetical upcoming Black Swan that the students create.

Details of that post, including the entry documents for the project can be found HERE.

I will be posting updates on the project as the class works through it, in order to give everyone an idea of what project-based learning looks like in practice.

Need to Knows

Today, the class went through the following project roll out activities:

Read the entry document (This document provides the framework of the project for the students)
Students selected groups of 2-5
Rubric Review (Students are shown rubrics at start of project so they know what is expected of them)
Students document Knows and Need to Knows. This allows students to assess their prior knowledge and express what they need to know to successfully complete the project. Need to Knows also tell the instructors what areas they need to provide instruction and support to the students.
Students create group contract that specifies each group member’s role in completing the project

After the groups completed the rollout activities (which generally take 45 minutes to 1 hour, combined) each student read the Prologue to the book “The Black Swan,” and completed a short five question quiz in Google Docs to demonstrate that they had read.

If you don’t have access to a copy of the Black Swan, NPR has a copy of the prologue on their website.

You can find the five question quiz over the prologue HERE.

Next, we’ll talk about workshops and how they will be used in the Black Swan project.

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Project Based Economics: The Vanguard Black Swan Fund (Part I – Project Creation)

travisrmartin — Fri, 30 Dec 2011 05:58:29 +0000

One of the benefits of working in a New Tech High School, and using project-based learning (PBL) as a primary mode of instruction, is that people rarely tell you “that’s a stupid idea.” (Disclaimer: when I say people, I don’t mean students. Students will not hesitate to tell you if something is stupid, regardless of the format it is presented in).

So, last year when I suggested that the school take two classes that most students hate, World History and Economics, and combine them into one course, the only question my Principal had was “what are you going to call it?”

Six months later, I’m halfway through the inaugural edition of “Historical Foundations of Globalization.” What the class lacks in textbooks and curriculum maps, it makes up for in important sounding titles. My co-teacher, History guru Connie Deardorff, and I have knocked out about six projects so far this year, and have another half-dozen on the horizon.

The next project, which will run through January, involves that old Economics staple the stock market. Simple enough, right? Just throw the stock market game at them, and call it a day. But, that’s not how it works in PBL land. In PBL land, we need a project that is authentic and ties in real world application to classroom content. And, as an added bonus, the project has to seamlessly combine World History with Economics. Thankfully, making a project that fits all these requirements is easier than it sounds.

A few years ago, Nassim Taleb published the bestselling book The Black Swan: The Impact of the Highly Improbable. A Black Swan is a positive or negative event that has massive consequences, yet is unpredictable prior to its occurrence. According to Taleb, “a small number of Black Swans explain almost everything in our world.”

Since Black Swans have such a large impact on our lives, it would be nice to be able to prepare for them financially. This thought leads us to the driving question of the project: How can we construct a mutual fund that will provide investors with portfolio protection/growth in the event of a global calamity?

Basically, the idea is that the students select assets for a diversified mutual fund that will provide financial protection in the event of a large-scale Black Swan (it could be a virus like the Black Plague, a nuclear holocaust, a world wide drought, etc.). We are using Vanguard as a backdrop for the project, which has three deliverables:

Groups create and deliver an 8-12 minute presentation on a historical (already occurred) Black Swan event
Students select the stocks for a mutual fund that protects investors against a Black Swan of their choosing. For the fund, they create an accompanying prospectus, which describes the stocks in the fund, tracks their performance, and explains the historical events that the fund is hedging against.
Students create and deliver a presentation to sell the fund to financial advisers. We are having some local bankers and investment reps come in and critique the presentations.

The entry document, which frames the project for the students, and the instructions for completion of deliverable #1 (along with the rubric) are attached below.

Vanguard Black Swan Project Entry Document

Vanguard Black Swan Project Deliverable 1

Vanguard Black Swan Fund Deliverable 1 Rubric

Note: I’m taking a few liberties with the Black Swan concept. Mr. Taleb would argue that Black Swans, by nature, are unpredictable. As such, he would probably laugh at the idea of a mutual fund that promised protection against any Black Swan.

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Personal Finance Lesson: Mutual Fund Activities

travisrmartin — Mon, 03 May 2010 18:30:16 +0000

My MBA classes are winding down for the semester, which means two things: 1). I have been sleeping with a copy of Michael Baye’s Managerial Economics and Business Strategy on my head for the past two weeks and 2). I haven’t had any time to post lessons on here.

My last final is on Wednesday, so posting will resume at a more regular rate after that. In the meantime, here are a few mutual funds activities my Personal Finance class has been working on over the past few days. Enjoy!

Researching and Comparing Mutual Funds
Excel Worksheet: Mutual Fund Comparisons

Students learn the basics of comparing mutual funds by looking up fund information on Yahoo Finance.

Creating Your Own Mutual Funds
Instructions: Creating Your Own Mutual Fund

Students apply their knowledge of mutual funds by creating their own fund. They then “sell” their fund to the class in a PowerPoint presentation.

Sample Slide from Student "Create Your Own Mutual Fund" Presentation

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