The Dogs of the Dow strategy has been around awhile. It’s where investors pick the 10 stocks with the highest dividend yield in the Dow Jones Industrial Average at the end of the year, and invest equally in each one for the duration of the following year. Since they are high yielding, they are “dogs,” i.e. out of favor with investors. It was popularized in the 1991 book “Beating the Dow” by Michael O’Higgins.
It wasn’t the right strategy for 2021, when the Dogs generated a 16% return, underperforming the 21% rise for the broader Dow Jones Industrial Average DJIA,
But now the Dogs have some bite, at least in relative terms. The Dogs so far have returned 1%, outperforming their noncanine Dow counterparts that have dropped 6%, and the S&P 500, which has retreated by 9%. Then again, an investor can just go to cash and get similar returns without any risk.
| Ticker | Company | Yield at end-21 | YTD change |
| DOW, |
Dow | 4.94% | 6.1% |
| VZ, |
Verizon Communications | 4.93% | -1.5% |
| IBM, |
International Business Machines | 4.91% | -0.8% |
| CVX, |
Chevron | 4.57% | 15.5% |
| WBA, |
Walgreens Boots Alliance | 3.66% | -3.5% |
| MRK, |
Merck | 3.60% | 5.1% |
| AMGN, |
Amgen | 3.45% | -0.4% |
| MMM, |
3M | 3.33% | -3.2% |
| KO, |
Coca-Cola | 2.84% | 0.7% |
| INTC, |
Intel | 2.70% | -6.4% |
| Source: Dogs of the Dow website | |||
This year has marked the widest gap in returns between the Dogs and the broad Dow 30 through the first 18 trading days of the year since 2001, says Jake Gordon, an analyst at Bespoke Investment Group.
The buzz
Apple AAPL,
Visa V,
Robinhood Markets HOOD,
One Dog of the Dow, Chevron, slipped as the oil major missed earnings estimates.
Employment costs in the fourth quarter rose 1%, though that was below estimates. Personal income also came in below estimates.
The market
U.S. stock futures zig-zagged ahead of the open, with the S&P 500 ES00,
The yield on the 10-year Treasury TMUBMUSD10Y,
Top tickers
Here were the most active tickers on MarketWatch as of 6 a.m. Eastern.
| Ticker | Security name |
| TSLA, |
Tesla |
| AAPL, |
Apple |
| GME, |
GameStop |
| AMC, |
AMC Entertainment |
| NIO, |
NIO |
| NVDA, |
Nvidia |
| HOOD, |
Robinhood Markets |
| XELA, |
Exela Technologies |
| MSFT, |
Microsoft |
| AMD, |
Advanced Micro Devices |
Random reads
Watch CNBC’s Jim Cramer douse an ARK with some Sark to make an exchange-traded fund metaphor.
Proving all publicity is good publicity, Barnard Castle set a record for visitors after a controversial lockdown trip there by a former aide to U.K. Prime Minister Boris Johnson.
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