Dogs of the Dow: Beating the market through three quarters


The stocks in this year’s Dogs of the Dow have all performed well, and the group as a whole continues to outpace the overall market as we head into the fourth quarter.

At our last update, we noted that this year’s group was up 17.1% on average, versus a 6.0% gain for the overall Dow Jones. Over the last month, the Dow Jones weakened a bit, while our group of stocks inched slightly higher.

Currently, the Dow Jones is up 4.8% on the year, while our group of stocks (including dividends) has appreciated by 17.8% on the year.

For those not familiar with the strategy, the basic idea is to purchase an equal dollar-weighted amount of the top ten yielding stocks in the Dow Jones, and hold the positions through the course of the year regardless of market conditions.

The idea is that the stocks are undervalued, which is why the yields have grown so much, and through the year these are the stocks that will most likely attract buyers looking for both value and income.

So far the strategy is working perfectly, and with less than three months left in the year it is hard to imagine a scenario in which the group will fall below the overall market.

Let’s take a closer look at each of the ten stocks in the group, and how each has contributed to the group’s success through the first three quarters of the year.

Michael Fowlkes

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.

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