Anyone use either of these? I’m holding a ton of cash right now and looking to buy. I’m thinking the yields on BAC and C might get slashed further dropping their prices, but I like the spririt of the Dogs of the Dow strategy and it holds up in most years. Symbol Yield BAC 8.60% PFE 7.12% C 6.25% GM 6.08% VZ 4.61% T 4.36% MRK 4.28% GE 4.25% JPM 3.84% DD 3.47%
Also, DSF is down about 25% from 12 mos. ago vs. -12% for DIA as well as SPY.
It isn’t dogs of the dow that works well, it is net payout yield. In other words you shouldn’t look at just dividend yield, but also consider the effects of buybacks. Smartmoney has a search that let’s you sort them on this basis. If you look at the dogs of the dow strategy and find that over the past year one or two of the sectors have had the worst returns, then it might make sense to stay away from them until they show some upward momentum. Right now, you’re probably much better off keeping the money in money market funds than investing in financials.
http://seekingalpha.com/article/27929-payout-yield-who-said-you-can-t-teach-an-old-dog-new-tricks that article seems to agree with you, jmh. From 1983 - 2003 the various strategies returned: Dow: 13.4% DOGS: 16.2% NPY: 19.1%
http://www.smartmoney.com/jackhough/?story=screen&dl=1 and here is the screener. I notice BAC and C are at the very bottom of the list with negative NPY’s. Thanks jmh.
means nothing
what would annual returns have been if you picked the 6th through 10th DOW stocks when sorted by market cap, and pooled those together with the 6th-10th DOW stocks when sorted alphabetically?