What are the odds of picking a stock that is suitable for a long term buy and hold strategy?
It is said that all the performance of the S&P is attributable to 4% of the stocks. Over a one year period I have thought the percentage of stocks that beat the S&P is about 15% and over a 15 year period it rises to about 30%.
Whatever number you want to use , it is low. This goes a long way to explaining the poor performance of financial advisors and investors. The available options have poor performance.
Now what does Stars do. It’s two ETFs pick the best 100 stocks of its 600 stock portfolio for most of the weighting. These 100 stocks represent 1.5% of the total 6000 stocks available on the major exchanges.
Not only does Stars pick the best 1.5 % of the stocks but it is continually picking the best 1.5% of stocks. Stars does this using cap weighted ETFs.
I think people can’t comprehend the extraordinary performance of Stars over the past 26 years. It outperformed the S&P by a factor of 17. That is a return of 21% per year for 26 years. That equates to a total return of about 14,000%. If that isn’t insane enough, the return over the past 14 years is 32% per year which is a total return of 140,000% over 26 years.