Many investors think that if they know enough they can outperform the S&P. They believe this in spite of the fact that 85% of investors have not beat the S&P for 70 years. You know it is difficult because the best money managers struggle. Why is it so difficult?

The odds of picking a stock that will beat the S&P in a year is at best 15 – 30%. Now you have to do that for your whole portfolio. Not only that but most investors hold investments for about 6 months. So you have to find another stock. A greater problem is that investors sell their stocks that have risen instead of the ones that have fallen. They keep their losers and sell their gainers. Always sell your worst performer to fund another purchase.

Very few investment products can beat the S&P. Blackstone outperforms the S&P by about 6 percentage points per year over the past 15 years. There are a few ETFs that beat by 9 percentage points but they are narrowly focused and will not be able to repeat.

Remember to be making money you have to beat the S&P because you always have the option of buying the S&P. Financial advisors usually don’t recommend buying the S&P because you don’t need them to do that.

All great wealth was made by buy and hold strategies. This minimizes taxes and allows compounding to work for you. The Stars model uses two cap weighted ETFs to select the stocks. It rebalances annually the volatile ETF against the S&P. The results are phenomenal. When compared against the greatest investors of all time Stars ranks number 18. None of the other top 17 are available for investment.