Dogs Of The Dow: Is This Strategy A Winner?

The College Investor Audio Show · Mar 13, 2020 · 4m

The Dogs of the Dow is an investment strategy with history. Michael B. O'Higgins suggested that one should purchase last year’s losers in the Dow Jones Industrial Average. The methodology is very simple:

Each year investors are to:

Find the dividend yields of all Dow Jones Industrial stocks.

Invest 10% of their capital in 10 of the highest-yielding companies.

Liquidate and select new positions on January 1 of the following year, using the same methodology.

Sounds pretty simple, right? Well, let's break it down, see if the strategy is a winner, and what stocks make up the Dogs of the Dow.