Dogs of the Dow

With a new year approaching, it’s a good time to look into The Dogs of The Dow investment strategy. This strategy is popular and has beaten the performance of the Dow Jones average eight out of the last 10 years. 

The strategy is simple: Buy the highest yielding stocks from index, which are generally updated in January of each year.

The reasoning is this: The highest yielding stocks have the lowest stock prices and they will correct over time. Remember, a stock that costs $20 and has a $1 dividend is yielding 5%. If the price of the stock drops to $10, the yield goes up to 10%. 


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The thinking behind the Dogs strategy is that large companies in the Dow Jones index are fundamentally sound and stock price declines that are evident in the higher dividend yields will correct, delivering a gain to investors. 

Here Are Last Year’s Dogs:*

Here Are Likely Dogs for 2020:**

* Caplinger, Dan (August, 2019). Here Are the 2019 Dogs of the Dow. The Motley Fool. Retrieved November, 2019
** Anonymous (2019). Dow 30 Dividend Stocks. Retrieved November, 2019