Dogs of the Dow
Contents
- Understanding Dogs of the Dow
- Exploring the Strategy
- Methodology Behind Dogs of the Dow
- Capitalizing on Dividend Yields
- Sample Performance Comparison
- Evaluating Long-Term Results
- 2022 Dogs of the Dow
- The following table lists the ten Dogs of the Dow for 2022:TickerCompanyDividend YieldDOWDow4.94%VZVerizon4.93%IBMIBM4.91%CVXChevron4.57%WBAWalgreens3.66%MRKMerck3.60%AMGNAmgen3.45%MMM3M3.33%KOCoca-Cola2.84%INTCIntel2.70%Embracing the Strategy
Unveiling Dogs of the Dow: A Strategic Approach to Beat the Market
Understanding Dogs of the Dow
Investment strategies often seek to outperform market benchmarks, and Dogs of the Dow is no exception. This renowned approach focuses on high-yield investments within the Dow Jones Industrial Average (DJIA), aiming to deliver competitive returns by capitalizing on dividend yields.
Exploring the Strategy
Dogs of the Dow gained prominence in 1991 with the publication of Michael B. O’Higgins’ book, "Beating the Dow." The strategy involves selecting the ten highest dividend-yielding stocks among the thirty DJIA components, then rebalancing the portfolio annually to maintain alignment with market conditions.
Methodology Behind Dogs of the Dow
Capitalizing on Dividend Yields
Central to the strategy is the assumption that blue-chip companies maintain stable dividend payouts regardless of market fluctuations. By prioritizing stocks with high dividend yields relative to their prices, investors aim to capitalize on potential stock price appreciation alongside consistent dividend income.
Sample Performance Comparison
Evaluating Long-Term Results
While the Dogs of the Dow strategy experienced heightened losses during the 2008 financial crisis compared to the DJIA, its decade-long performance post-crisis showcased resilience and competitive returns. Investors leveraging this strategy benefitted from dividend payments, contributing to a notable increase in portfolio value.
2022 Dogs of the Dow
The following table lists the ten Dogs of the Dow for 2022:
| Ticker | Company | Dividend Yield |
|---|---|---|
| DOW | Dow | 4.94% |
| VZ | Verizon | 4.93% |
| IBM | IBM | 4.91% |
| CVX | Chevron | 4.57% |
| WBA | Walgreens | 3.66% |
| MRK | Merck | 3.60% |
| AMGN | Amgen | 3.45% |
| MMM | 3M | 3.33% |
| KO | Coca-Cola | 2.84% |
| INTC | Intel | 2.70% |
Embracing the Strategy
Dogs of the Dow offers simplicity and alignment with market trends, making it an accessible option for investors seeking a long-term, low-maintenance approach. While individual results may vary, the strategy's historical performance underscores its potential as a viable investment method.