Mint Money Knowledge Center: Dogs of the DOW strategy

Many people don't get into investing because it sounds complicated or it looks complicated on television. But when you break investing down into its component parts, you realize that it is not nearly as complicated as you thought. For example, the 'Dogs of the DOW' investment strategy sounds like a complicated investment technique. But when you look at it closely, you realize that it is not that complicated at all.

Dogs of the DOW strategy

 

What Is The 'Dogs Of The DOW'?

According to Investopedia.com, the 'Dogs of the DOW' is an investment strategy that simply tells the investor to make sure that they have the top 10 performing stocks from the Dow Jones Industrial Average (DJIA) in their portfolio. The DJIA holds 30 of the biggest stocks available and the 'Dogs' strategy says that an investor should have the top 10 dividend-producing securities in their portfolio. If a security falls out of the top 10, then it is removed from the investor's portfolio and replaced with the security that has moved up.
 

The 'Dogs' Works

According to CNBC.com, the 'Dogs of the DOW' strategy outperformed the DJIA by at least one point in nine out of the 14 years from 2000 to 2014. With a track record like that, it is no wonder that more investors are discovering the 'Dogs' strategy and putting it to work for them.

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