For short term strategies you exit the trade if the risk limit is exceeded. For long term buy and hold strategies you never sell at a correction low. You only sell to take profit on the volatile component at the annual rebalancing.

The risk of a buy and hold strategy goes to zero with increasing holding period and performance. With the Stars model this is usually after a couple years. The price has risen so much that when you rebalance you are above the original purchase price and never have a loss.

Performance proves that long term risk is not the same as short term risk. Stars buy and hold strategy outperforms the S&P by a factor of 17 over the past 26 years. The average investor portfolio which has a holding period on average of 6 months underperforms the S&P by 5% per year.

Berkshire Hathaway is a buy and hold strategy. At correction lows it does not sell. It buys more of the desired stocks at discounted prices.

The main problem for buy and hold strategies is what to hold. For Stars the best holdings are SPY and TQQQ. These cap weighted ETFs select the stocks for you and are constantly improving what they hold by incrementally buying what is rising the most and incrementally selling what is falling.

All great wealth was obtained by investing in buy and hold strategies.