Dogs of the Dow Investment Strategy: Does It Work or Not?
Jim Pyke submits:The Dow Jones Industrial Average (DJIA) is one of the most watched stock market indexes in the world and the second oldest index in the United States. It is a price-weighted average, unlike the S&P 500 which is weighted by equity market capitalizations. The DJIA was formed on May 26, 1896 by Charles Dow. For the casual investor, the easiest way to obtain exposure to the DJIA is through the SPDR Dow Jones Industrial Average ETF (DIA).The Dogs of the Dow (DOD) theory postulates that a portfolio of the highest yielding stocks at the start of the year will out perform the DJIA as a whole over the next year. However, the Dogs of the Dow portfolio is currently underperforming the average Dow Jones Industrial Average (DJIA) stock this year. In terms of price appreciation, the DOD stocks have averaged 1.2% gain while the full 30 stocks are averagingComplete Story »