When should I start – NOW! Let’s admit that we can’t call market direction which means we can’t pick bottoms. The lost opportunity cost of not always being in the market is 20% per year.

The most important concept in improving your performance is to get rid of everything in your portfolio that is worse than 10% below the S&P on an annual basis. The sooner this is done the better. Once it is accomplished be sure and do it every year. The first time you can do this as fast as you are comfortable with.

In the first year sell the worst 10% of your portfolio and buy TQQQ. These holdings are probably 30% below the S&P. If so, your incentive to do this on that 10% slice is 80% because you will get rid of 3% underperformance and add 5% of overperformance. The second year do the same thing for the next 10% worst performers. The incentive to do this may be as high as 70%.

Now your portfolio performance has been raised from a typical performance of 5% below the S&P to 10% above the S&P which few holdings exceed.

Over the past 16 months the Stars buy and hold strategy has exceeded the average performance of Berkshire Hathaway, Blackrock, and Blackstone by 42 percentage points. Stars only outperformed the S&P by 11 percentage points so most of the outperformance was due to underperformance of the three investment firms.