There are a very few great traders that way outperform the market. Most investors have a trading accuracy of 40 – 60%. To get back to break even they have to first cover the losses. Constantly investors have to find new investing ideas. They have to find the stock and entry price, know market direction, and have an exit goal. A lot of decisions are required and none are completely correct.

The Stars buy and hold strategy requires two trades a year to rebalance the TQQQ position to the percent described by the 4 strategy rules. Stars doesn’t care about market direction. The two cap weighted ETFs pick the stocks. The stock holdings are constantly improved by cap weighting which buys more of stocks rising and reducing the positions of what is falling.

Why is investor performance so poor? Investors like to buy stocks that have fallen in price and represent good value. Value stocks underperform the market by 10 percentage points per year. Also picking good stocks is extremely difficult. Only about 4% of all stocks make up all of the long term performance of the market.

Why don’t investors use model based investing? Most don’t know of a great model like Stars. Also most investors are afraid of drawdown. Investors don’t realize drawdown doesn’t cause a loss unless you sell. Correction lows should be seen as an opportunity to buy many more shares at very low prices.