Beat the Dow – with Dogs of the Dow – the Easiest Way to Beat the Market
(Editor’s Note, February 2000) This article originally aired in November 1998. Since then,
the tech stocks have been showing incredible growth, thus this advice on the “Dogs of the Dow” may no longer
Investing in the “Dogs of the Dow” is a strategy that has upheld over the past 30 years.
What are the dogs? Simple. You take the 10 stocks in the Dow with the highest dividend yield and the lowest prices,
and you have the “Dogs.” If you would have invested $10,000 in 1968 in the 10 Dogs, today your portfolio
would be worth $758,000. Nice profit! But according to many of today’s market mavens, a new theory is even better.
1. Take 5 of the highest dividend yield and lowest
price per share and you have a stronger portfolio! Over the last 30 years your wealth would now be $1,092,830.
An increase of 44% or $334,830 over the “old” method. AN EVEN NICER PROFIT!
2. When should you invest in the Dogs? Anytime you have the finances in which you have to put
equal amounts of dollars in each of the 5 stocks.
3. What you do is begin the first of the year and hold them until the end of the year. The following
year you start all over again.
4. If you want to start now and a lot of people will, here are the five Dogs of the Dow (as of
Philip Morris (MO): 3.8% yield
Caterpillar (CAT): 2.5% yield
AT&T (T): 2.3 % yield
General Motors (GM): 3.4 % yield
DuPont (DD): 2.3 % yield
UPDATE, July 1, 1999:
Year To Date: 1/1/99-6/30/99
Total for all 5 Dogs of the Dow + 5.24 %
Philip Morris: – 26.27 %
Caterpillar: + 31.32
AT&T: adj. 2-1 split + 7.55 %
General Motors: – 9.5 %
DuPont: + 23.21 %