Relative performance is a key metric in evaluating investment strategies. For the Stars model (20% TQQQ / 80% SPY) compared to SPY (the market standard S&P index), here’s what the data tells us:

1. In a hard down market, the model underperforms SPY by 10 percentage points.
2. The year after a market bottom, it outperforms SPY by a remarkable 60 percentage points.
3. In normal market conditions, relative performance ranges from 0-20% annually.
4. Over the past 15 years, the average relative performance is 12 percentage points.

What This Means for Your Portfolio:

With the market highly concentrated in a few stocks, there’s a good chance that 20% of your portfolio is lagging SPY by 20%. By reallocating this portion to 20% TQQQ, you could add an impressive 16 percentage points to your overall portfolio performance.

This strategy leverages a disciplined approach—incrementally buying higher and selling lower—to optimize returns.

Curious about how this could fit into your investment plan? Let’s connect and discuss!