Dogs of the Dow

“Dogs of the Dow” or “High Yield 10” is a popular investment strategy that recommends buying the Dow stocks with the 10 highest dividend yields at the beginning of the year.

The basic strategy suggests putting an equal amount of money into each of the 10 stocks; although there have been variations that include proportionate investments in the Dogs weighted by share price.

Other permutations suggest dropping the lowest price / highest yielding Dog out of concern that the there may be a reason as per why the yield is so high.

So far this year, the Dogs of the Dow strategy worked. The 10 companies that made it to the list at the beginning of 2010 are up on average 14 percent, compared to a 5 percent gain for the non-dog stocks and a 10 percent rise for the Dow.

Some notes for me from here.

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