Stars does not try to pick minor corrections in mid year for many reasons. They require constantly monitoring the market. They are not large enough to significantly improve the model. They reduce the average holding period of the strategy which might reduce accuracy and increase theoretical risk. They are hard to execute because they don’t last very long.

A major correction occurs when at year end TQQQ is down 40% from the previous year end price. These don’t occur very often but when they do, Stars increases the concentration of TQQQ in several of the versions of Stars. These major corrections come at the point of maximum drawdown.

At the major correction low the TQQQ portion of Stars acts like as much as 32 times the S&P. Normally it acts like 4 times the S&P.

The odds of a major correction this year is extremely low since we had one 4 years ago. They only occur about 4% of the time.

For conservative investors that want to reduce drawdown, the best version of Stars rebalances to 10% TQQQ most of the time and to 40% TQQQ at major correction lows.