Wednesday , 6 December 2023

What You Should Know About the “Dogs of the Dow” Investment Strategy (+2K Views)

The “Dogs of the Dow” is a simple and effective strategy that has outperformed the Dow over the last 50 years and generates almost 4% in yield. Here’s how it works. Words: 486

So writes Andy Crowder ( in edited excerpts from his original article* entitled A Conservative Strategy to Consistently Beat the Dow.

This article is presented compliments of (A site for sore eyes and inquisitive minds) and (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Crowder goes on to say in further edited excerpts:

Our goal is to provide you with long-term strategies that will carry you into retirement and beyond…[and] one of my favorite long-term strategies is “The Dogs of the Dow”. Here’s how it works:

  1. Pick the 10 highest-yielding of the 30 Dow stocks, and
  2. equally weight the stocks within your portfolio. It requires nothing else in the way of research. After the initial set-up all you will need to do is
  3. adjust the portfolio annually (oftentimes, most of the stocks will remain on the list from one year to the next, simplifying things from an accounting perspective – no gains/losses to report – and also helping to lower commission costs)
  4. reap the rewards
  5. and then the whole process starts over.

Historically, the Dogs of the Dow strategy have outperformed the larger Dow by approximately 3% a year. It doesn’t get any simpler, right?

In order of current yields, 2013’s Dogs of the Dow are made up of the following stocks:

Stock Ticker Yield
AT&T T 5.14%
Verizon VZ 4.68%
Intel INTC 4.22%
Merck MRK 4.06%
DuPont DD 3.93%
Pfizer PFE 3.71%
General Electric GE 3.60%
Hewlett-Packard HPQ 3.50%
Johnson & Johnson JNJ 3.45%
McDonald’s MCD 3.40%


While the Dogs have beaten the Dow 30 Industrial Average’s performance in two of the last three years, they’ve only come out ahead in three of the last seven, but simply beating the Dow is not the be-all and end-all of this strategy.

Of particular interest to income investors is the fact that the Dogs start every year with a distinct advantage over the rest of the Industrials. This time around it’s a combined yield of just below 4.0% versus about 2.6% for the index as a whole. That may not sound like much but in a world where money-market funds and bank accounts pay about one-tenth of a percentage point, and with the Federal Reserve resolving to keep things that way until at least 2014, solid blue chip stocks with good yields tend to be sought out by a wide group of investors, both retail and institutional. This suggests that the underlying demand for these shares will remain strong, if not increase, in the quarters ahead.

Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.

* (If you would like to learn more about options and how you can generate steady income month in and month out… then consider taking a free, 30-day trial to our real money alert service, Options Advantage. You’ll discover exactly how our resident options expert, Andy Crowder, is using high probability trades to steadily grow a $25,000 real money portfolio. Every trade is executed for real… and readers are alerted instantly, so they can invest right alongside Andy. Click here to try Options Advantage, free.)

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