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Terms Of The Trade: Dogs Of The Dow Investing Strategy

August 3, 2016 2:38 pm
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Dividend investing has always been a top strategy for long-term investors, but it has become even more popular in the current difficult global financial environment. There are a number of dividend investment strategies, but one of the most popular strategies is the “Dogs of the Dow” strategy.

The Dogs of the Dow strategy is extremely simple. The Dow Jones Industrial Average is made up of 30 of the largest American blue chip stocks. Of the 30 stocks, the 10 with the highest dividend yield at any give time are considered to be the Dogs of the Dow. Dogs of the Dow traders simply buy these 10 dividend stocks and then re-adjust their portfolio periodically to keep it up-to-date.

Related Link: Now That You're Making The Big Bucks, Should You Save Or Invest?

Since 2000, the Dogs of the Dow have produced an average annual return of 7.9 percent, beating out the S&P 500’s annually return of 5.8 percent. Here’s a look at the current Dogs of the Dow and their dividend yields:

  • Merck & Co., Inc. (NYSE: MRK) — 3.1 percent.
  • The Coca-Cola Co (NYSE: KO) — 3.2 percent.
  • Pfizer Inc. (NYSE: PFE) — 3.2 percent.
  • Boeing Co (NYSE: BA) — 3.2 percent.
  • Exxon Mobil Corporation (NYSE: XOM) — 3.3 percent.
  • Cisco Systems, Inc. (NASDAQ: CSCO) — 3.4 percent.
  • International Business Machines Corp. (NYSE: IBM — 3.4 percent.
  • Caterpillar Inc. (NYSE: CAT) — 3.7 percent.
  • Verizon Communications Inc. (NYSE: VZ) — 4.0 percent.
  • Chevron Corporation (NYSE: CVX) — 4.1 percent.

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Disclosure: The author holds no position in the stocks mentioned.

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