Dogs of the Dow

by Charles Rotblut, CFA

Dogs Of The Dow Splash image

Every January, Dogs of the Dow draws attention. The strategy is simple. At the start of every calendar year, sort through the 30 stocks in the Dow Jones Industrial Average and buy the 10 with the highest yields. An equal dollar amount is allocated to every stock and the portfolio is held for the entire year. On the first trading day of the next calendar year, repeat the process.

The idea behind the strategy is that every year a new portfolio will be created. This portfolio is designed to be held for 12 months. Investors should profit by purchasing supposedly out-of-favor stocks whose relative yields

...To continue reading this article you must be registered with AAII.

Gain exclusive access to this article and all of the member benefits and investment education AAII offers.
JOIN TODAY for just $29.
Log in
Already registered with AAII? Login to read the rest of this article.

Register for FREE
to read this article and receive access to future AAII.com articles.
  
Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at twitter.com/charlesrotblut.


Discussion

Bill from Indiana posted over 3 years ago:

I am posting my questions here, even though it's not regarding the Dogs of the Dow, because I didn't know where else to post it.

Maybe I've overlooked something but....

1. Why isn't standard deviation and Sharpe Ratio provided for each stock screen?

2. Even though the "Portfolio Charactistics of Stock Screens" summary table provides "market cap" expressed in dollars, it doesn't label each by asset class (or sub asset class -- e.g. large cap value, large cap growth, etc.)

I ask this because the importance of asset allocation (by asset class) has been throughly credited as the single most dominating factor in long-term returns. It seems that

Thanks!


Peter from Arizona posted over 3 years ago:

I am a new subscriber. I notice that all recommendations are based on fundamental data with no mention of technical analysis involving entries, position sizing or specific exits. I have a sneaking suspicion why this is, but I like to hear your response. Regards.


Mario from Florida posted over 2 years ago:

no answer 1 yr so..... answer please


Charles from Illinois posted over 2 years ago:

Mario, if there is a question we can answer for you, you send us a note on our contact page: http://www.aaii.com/contact/journal -Charles Rotblut


Sudhir Joshi from Texas posted about 1 year ago:

It would be interesting to see some research on using the 'dogs of the Dow' strategy on the S&P 500 or S&P 100. For example, instead of buying the 10 highest yielding stock in the Dow, what would the results have been if an investor had bought the 10 of the highest yielding stocks in the S&P 500 or S&P 100? That's a much bigger selection of stocks.

Does anyone know if that has been researched?


Marion Miller from Indiana posted about 1 year ago:

In the 1980's, aided by a rising market, I bought Dow Dog 5 stocks in my IRA, $3000. each. Following the recommended procedure, each year in the following 4 years, I balanced the 5 stocks, the amount per stock kept rising. At the end of the 5 years my $15,000. initial investment had grown to $75,000. I currently have a Dow Dog 5 Trust which just matured. The past year it gained 15%.


Darryl Weidler from Massachusetts posted about 1 year ago:

Can you tell me how the "Dogs of the Dow" has performed over perhaps the last 10 years.


Charles Rotblut from Illinois posted about 1 year ago:

Darryl,

You can see performance for all our screens, including Dogs of the Dow, in the stock screening area of the website: http://www.aaii.com/stock-screens/

-Charles


John Hayes from New Jersey posted about 1 year ago:

Where can I find a current list of the dogs of the Dow?


Charles Rotblut from Illinois posted about 1 year ago:

John,

The Dogs of the Dow screen, which is updated monthly, can be found at:
http://www.aaii.com/stock-screens/screendata/Dogs

-Charles


You need to log in as a registered AAII user before commenting.
Create an account

Log In