The Stars model calls for doubling the percentage of TQQQ when it’s down 40% at year-end—a rare event that has occurred only once in the past 16 years and just four times in the last 26 years. Since these moments are so infrequent, their impact on long-term returns is limited to short periods.

What does this mean for returns?

In 2022, increasing the TQQQ allocation from 20% to 40% boosted returns by 5 percentage points over five years.

A 10% TQQQ portfolio doubling to 20% would add only 2 percentage points, but increasing it to 40% would yield a 10-point boost.

For portfolios at 30% or 40%, doubling the position would create excessive risk.

What happened after the 2022 correction?

The 20% TQQQ model dropped 31% in 2022.

The next two years saw a staggering 180% gain!

The 3-year return was 96% (25% per year)—matching the model’s 14-year average return.

Two years after the correction, the model had nearly doubled its pre-COVID high.

The takeaway? Corrections are not setbacks—they’re opportunities. A sharp downturn is often just a pause before exceptional performance resumes.