Modern Portfolio Theory is 75 years old. It still dominates most financial advice—but at what cost?

The foundation of this theory is diversification and risk-adjusted returns. But over time, that approach has led to average investor performance trailing the S&P 500 by about 5% annually.

Jack Bogle offered a better path 40 years ago: if you can’t beat the market, buy the market. Index fund investing and dollar-cost averaging into the S&P became the new standard. It worked—boosting investor returns by roughly 5% annually. This was the first generation of model-based investing.
But let’s look at how real wealth is built.

Most wealthy investors don’t sell during corrections. They buy more. Whether through concentrated company stock or broad holdings, they ignore volatility and ride out downturns. They’re not optimizing for Sharpe ratios—they’re focused on growth.

The Stars model is the next generation of model-based investing.
It doesn’t rely on diversification. It’s a disciplined buy-and-hold strategy that defies Modern Portfolio Theory—and consistently outperforms the S&P, often by a factor of 2 or more.

After a few years, its accuracy approaches 100%. Its repeatable process delivers high returns. The Stars model may be the most effective wealth-building machine the market has ever seen.