Dogs of the Dow News Explained: How to Invest Wisely

The Dogs of the Dow strategy is a simple yet effective way to invest wisely. By focusing on the 10 lowest-performing Dow Jones stocks, you can potentially buy undervalued companies with high dividend yields.

Investing in the Dogs of the Dow requires a long-term perspective. You need to be willing to hold onto your stocks for at least a year to ride out market fluctuations.

The strategy is based on the idea that the lowest-performing stocks are often the most undervalued and due for a rebound. This is because the market tends to overreact to news, causing prices to drop too low.

By investing in the Dogs of the Dow, you can potentially earn higher returns than the overall market.

The Dogs of the Dow refers to a stock-picking strategy that uses the ten highest dividend-yielding stocks from the Dow Jones Industrial Average (DJIA) each year.

This strategy was popularized by American money manager and author Michael B. O'Higgins in 1991. He's the one who made this strategy well-known.

The Dogs of the Dow strategy is a long-term investment strategy that's designed to be low-maintenance and safe. This is because the universe is limited to blue-chip stocks.

To employ the Dogs of the Dow strategy, you need to select the 10-highest dividend-yielding stocks in the DJIA on the last day of the year. Then, on the first trading day of the new year, invest an equal dollar amount in each of them.

The idea is to mimic the performance of the DJIA over time, which is impressive. There have been years when the Dow has outperformed the Dogs and vice-versa, but its performance over time is impressive.

The Dogs of the Dow strategy is easy to implement, and there are many tools available online to help you do so. Just browse the Internet to see Dogs of the Dow opinions, commentary, analyses, calculators, charts, forecasts, and stock screeners.

The Dogs of the Dow strategy is a simple yet effective way to invest in the stock market. It's designed to provide investors with a good chance at generating strong returns while being relatively lower-risk.

To start, you'll need to select the top ten dividend-yielding stocks from the Dow Jones Industrial Average. This is done by calculating the dividend yield for each stock, which is the annual dividend divided by the current stock price.

The strategy involves investing equal amounts into each of the top ten dividend-yielding stocks. The idea is that by selecting from only the 30 stocks in the Dow, you're already filtering to blue-chip companies.

The next step is to rebalance the portfolio every year into equal amounts of the 10 highest-yielding stocks in the Dow and to repeat this process every year. This is because the work done by O'Higgins and others indicates that, over the long term, the strategy can generate higher returns than investing in an index fund that tracks the Dow.

The reasoning behind this strategy is that the Dow stocks with the highest yields are often the ones that have underperformed recently, or even lost value. But, as a Dow component, these are already some of the highest-quality companies out there.

Here's a breakdown of the top 10 companies in the 2023 Dogs of the Dow:

By repeating this process each year, you can take advantage of temporary price dislocations and an eventual recovery, profiting from above-average dividend yields along the way.

The Dogs of the Dow strategy is a straightforward approach to investing, and let's take a look at how it works in practice.

Tim recently used this strategy with $100,000 to invest and chose the top ten dividend-yielding stocks from the list of 30 different companies on the Dow.

The Dogs of the Dow strategy has been tested over time, and its performance is worth examining.

From 2013 to 2023, the Dogs of the Dow had a trailing total return of 10.02%, while the Dow Jones Industrial Average (DJIA) had a trailing total return of 11.48%.

Despite losing more in 2008 than the DJIA, the Dogs of the Dow made up ground and turned in a respectable performance for the decade, with a very similar result to the DJIA.

In the last five years, however, the Dogs have trailed the DJIA with a wider gap, turning in trailing total returns of 5.29% compared to the DJIA's trailing total return of 8.39%.

If you're looking to invest in the Dogs of the Dow strategy, you can consider the Invesco Dow Jones Industrial Average Dividend ETF (DJD) or the ALPS International Sector Dividend Dogs ETF (IDOG).

These ETFs invest in a similar strategy with a dividend focus on the Dow.

The Dogs of the Dow strategy involves investing in the top 10 dividend-performing companies in the Dow.

Here's a brief rundown of some of the top dividend-performing companies in the Dow:

Keep in mind that individual results may vary, and it's essential to do your own research before making any investment decisions.

The Dogs of the Dow strategy relies on a simple yet effective premise: blue-chip companies tend to maintain their dividend yields even during economic downturns, while stock prices fluctuate.

This means that companies with high dividend yields relative to their stock price are likely near the bottom of their business cycle, making them good candidates for investment.

The Dogs of the Dow methodology involves identifying the 10 highest-yielding stocks in the Dow Jones Industrial Average (DJIA) and investing in them.

These stocks are often referred to as the "Dogs" because they have a high dividend yield relative to their stock price.

For example, the 2023 Dogs of the Dow include Verizon (VZ), Dow (DOW), and Intel (INTC), among others, with dividend yields ranging from 3.16% to 6.62%.

Here are the 2023 Dogs of the Dow, listed in order of their dividend yield:

By investing in these high-yielding stocks, you can potentially outperform the overall market.

The Dogs of the Dow investment strategy is a straightforward approach to picking top-performing stocks. It involves selecting the top ten highest dividend-yielding stocks from the Dow Jones Industrial Average (DJIA).

The strategy is based on the idea that companies with high dividend yields are often near the bottom of the business cycle. This makes sense, as companies that are struggling to stay afloat may be more likely to offer higher dividend yields to attract investors.

Michael B. O'Higgins is credited with popularizing the Dogs of the Dow investment strategy. His approach has been widely adopted by investors looking for a low-risk way to generate income.

By focusing on high dividend yields, investors can potentially profit from companies that are undervalued and poised for a rebound.