Introducing Dogs Of The Carnavale Power 25 Index
By Fredrik Arnold:A once per year trading system triggered by yield, the Dogs of the Index strategy, was popularized by Michael B. O'Higgins in the book Beating The Dow (HarperCollins, 1991), revealing low yielding stocks whose prices increase (or whose dividends decrease) to be sold off once each year to sweep gains and reinvest the seed money into higher yielding stocks in the same index. Two key metrics determine the yields that rank the index dog stocks: (1) Stock Price; (2) Annual Dividend. Dividing the annual dividend by the price of the stock declares the percentage yield by which each dog stock is ranked. Thus investors, having selected their portfolios of five or ten stocks in any one index, are able to follow, trade, and await the results from their investments in the lowest priced, highest yielding stocks selected. O'Higgins' book focused on the Dow, otherwise known as Dow Jones, a CMEComplete Story »
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