One of the most important lessons from analyzing multiple versions of the Stars model is this: discipline matters more than prediction.
Here’s how it works with high-volatility investments like TQQQ:

✅ In years where TQQQ is down 40% or more, the maximum portfolio allocation is set at 60%.
✅ In all other years, the cap is 40%.

At the end of each year, the portfolio is rebalanced to maintain this target.
But how do we know how much TQQQ to buy or sell?
That’s where SPY (or an equivalent) comes in.
SPY acts as the benchmark that allows us to calculate the appropriate TQQQ percentage at year-end. Without it, the model wouldn’t have a consistent reference point to manage risk.

🔁 In up years: TQQQ is sold, SPY is bought.
📉 In down years: TQQQ is bought, SPY is sold.
📌 No rebalancing occurs the year after a market bottom.

You can substitute SPY with another asset that consistently outperforms it—but for most investors, SPY will be the most reliable option.

👉 The Stars model keeps risk in check while positioning your portfolio for long-term performance. It’s not about market timing—it’s about structural discipline.