One strategy that has gained a fairly good following over the years is investing in the Dogs of the Dow. This strategy consists of investing in the highest yielding stocks in the Dow Jones Industrial Average at the beginning of each year. At the end of the year an investor would invest in the then current Dow Dogs for the subsequent year. The performance of the Dow Dogs has underperformed the Dow Jones Industrial Average so far this year. (click to enlarge)
The below table lists the Dow stocks that were a part of the Dow Jones Index at the beginning of 2008. The table does contain the performance of the Dow before the three member changes this year and the performance with the three Dow changes. In both cases, the Dow Dogs are underperforming the Dow Index itself.
Source: Dogs of the Dow
As an investor, yield alone does not ensure a stock's outperformance.
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