Dogs of the Dow 2020: One of the Best Year-End Strategies

Years ago, Barron’s said the “Dogs of Dow Investing Strategy no Longer Works.”

But it’s just not true.

In 2009, the Dogs were 16.9%. In 2010, they jumped 20.5%.

In 2011, there were up 16.3%. In 2012, they jumped 9.9%. In 2013, they returned 34.9%. In 2014, they returned 10.8%. In 2015, they did okay, returning just 2.6%.

In 2016, the Dogs returned 16% on average. In 2017, the Dogs of the Dow returned 19% for the year.  In 2018, the Dogs eked out a 1% gain, as the Dow lost 5.6% for the year, according to Forbes. The best part – dividends were paid out from each of the Dogs, too.

In 2019, so far:

·         IBM ran from about $108 to $135.

·         Exxon Mobil ran from nearly $65 to $69.

·         Verizon ran from $53 to nearly $59.

·         Chevron ran from $107 to $121.

·         Pfizer was a dud for the year to date, falling from $41 to $37.

·         Coca-Cola ran from $46 to $53

·         JP Morgan Chase ran from $93 to $129

·         Procter & Gamble ran from $87 to $120

·         Cisco ran from $41 to $45 a share

·         Merck ran from $73 a share to $86

Better, the strategy is simple.

At the start of the year, buy the highest yielding 10 Dow Jones stocks that fell out of favor the year prior.  Invest an equal amount in each.  Sell by year end.  And repeat.

To this day, it’s still one of the best buy and hold strategies.  If you’re an options trader, you can always buy a call option a year out from January, as well.

By: Mitch Cooper, Analyst, with Wellington Insights

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