Dogs of the Dow


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Dogs of the Dow

The 10 stocks of the 30 on the Dow Jones Industrial Average with the most depressed prices and consequently the highest yields. The investor buying these stocks speculates that they will bounce back over a one-year period.

Dogs of the Dow

1. The 10 stocks (of 30) on the Dow Jones Industrial Average with the lowest prices and consequently the highest yields.

2. An investment strategy in which one buys the dogs of the Dow on the first of the calendar year and sell them exactly one year later. Theoretically, the extra risk involved in this strategy gives an investor a higher return than buying all 30 stocks on the DJIA.

dogs of the Dow

The investment strategy of purchasing the ten stocks in the Dow Jones Industrial Average that offer the highest current dividend yield. The ten-stock portfolio is continuously rebalanced as stock prices and dividends change. The theory is that Dow stocks offering the highest dividend yield are solid investments that are temporarily undervalued.

Dogs of the Dow.

If you follow a Dogs of the Dow investment strategy, you buy the ten highest-yielding stocks in the Dow Jones Industrial Average (DJIA) on the first of the year and hold them for a year.

According to this theory, the dogs will, over the year, produce a total return, or combination of dividends plus price appreciation, that's higher than the return on the DJIA as a whole. The increasing price is the result of demand for the high-yielding stock.

On the anniversary of your purchase, the stocks are no longer dogs because their higher prices reduce their current yield even if the dividend remains the same. So you sell them and buy the next batch of dogs.

References in periodicals archive ?
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Investors following the Dogs of the Dow investment strategy each year buy components of the Dow Jones Industrial Average with the highest dividend yield, betting that those stocks have been oversold.
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ELEMENTSSM--"Dogs of the Dow" (Dow Jones High Yield Select 10 Total Return Index)
The ALPS Sector Dividend Dogs ETF (SDOG) is an ETF that takes a novel approach by applying the "Dogs of the Dow Theory" on a sector-by-sector basis using the S&P 500 as its starting universe of eligible securities.
The "Dogs of the Dow" strategy involves picking the poorest-performing stocks in the index in the current year and holding them into the next.
* Type n Walk n Buy the Dogs of the Dow. Every 10 seconds, your iPhone splits in two.