You would think everyone would think price is important. As a model builder I want to maximize making money; therefore you would think price is the most important variable.

Many financial advisors think things like P/E ratio, free cash flow, dividend yield, earnings growth rate, annual return, or many other financial numbers are the most important.

In theory price incorporates all known information about a stock including future forecast estimates.

As important as price is relative price is even more important. This tells you which stock is appreciating the most and which is falling behind.

Stars uses relative price movements to pick the stocks held in the two cap weighted ETFs.

Many financial advisors would argue that selecting stocks is more complicated than just incrementally buying what is rising the most and incrementally selling what is falling.

The Stars model outperforms the S&P by a factor of 17 over the past 26 years. The average financial advisor underperforms the S&P by 5% per year.

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