Dogs of the DOW: Investment Strategy Overview

Overview:

Any investment requires discipline. There is no success in investment without exercising discipline and sticking to a proven investment strategy.  Are you looking for an investment strategy? If yes, I would like to introduce Dogs of the Dow – an investment strategy that has pretty good merit and history behind it.

 

Dogs of the Dow is a strategy of investing where you invest equal dollar amounts in the 10 highest paying dividend stocks in DOW 30 as of 12/31 of any given calendar year.

 

Dogs of the Dow – How It Works:

Let us say you have $10,000 to invest.

Step 1: At market close on 12/31/2015, identify the top 10 dividend stocks in the DOW 30 index

Step 2: On the first trading day in January (01/04/2016), invest $1000 each on the top 10 dividend stocks identified.

Step 3: Hold these stocks for the 1 year

Step 4: Repeat steps 1, 2, and 3 at the end of the year.

 

Small Dogs of the Dow – How It Works:

Do you want to beat the returns of traditional Dogs of the Dow? Of course, if you were like me, you would say “Yeah, why not!”

Let us say you have $10,000 to invest.

Step 1: At market close on 12/31/2015, identify the top 10 dividend stocks in the DOW 30 index

Step 2: Identify 5 stocks out of the top 10 dividend stocks from Step 1 with the lowest stock price. This is your Small Dog List.

Step 3: On the first trading day in January (01/04/2016), invest $1000 each on the top 10 dividend stocks identified.

Step 4: Hold these stocks for the 1 year

Step 5: Repeat steps 1, 2, 3, and 4 at the end of the year.

 

Historic Returns:

Below is a chart that shows historic returns of Dogs of the Dow, Small Dogs of the Dow, in comparison to DJIA and S&P 500 indices. The returns were calculated based on dividend reinvestment. Trade commissions were not considered while calculating the returns.

DogsOfTheDow_x1

(Courtesy – Chart taken from Dogs of the Dow)

 

Further Reading:

If you would like to learn more, please visit http://www.dogsofthedow.com. This site makes it very easy by providing the Traditional and Small Dogs of the Dow list of stocks, their YTD performance etc if you choose to follow the investment strategy. You could sign up for their newsletter to receive alerts and helpful investment tips.

 

Important Note: Past returns do not guarantee future performance. All investments and investment strategies have their risks associated with them. Information provided here is for education purposes only and shouldn’t be considered as investment advice.

 

Tags : ,

0 thoughts on “Dogs of the DOW: Investment Strategy Overview”

Leave a Reply

Your email address will not be published. Required fields are marked *