Dogs of the Dow continue to lag overall market – Part II

This is the second half of our two-part series taking a look at this year’s Dogs of the Dow.

As we discussed in part one of our discussion yesterday, this is the first year since we started tracking the strategy four years ago that the Dogs of the Dow have not been outpacing the overall market.

Year to date, the Dow Jones has appreciated by 7.6%, but the stocks in this year’s Dogs of the Dow have risen, on average, just 4.9% (including dividends).

The strategy is pretty straightforward. At the beginning of the year, you buy an equal dollar-weight amount of each of the top 10 yielding stocks in the Dow Jones, with the intent of holding all 10 stocks through the course of the year, regardless of individual performance. The idea is that the stocks’ yields have risen as high as they high because the underlying security is oversold and should rise more than the overall market through the course of the year.

As is always the case, there are a few stocks that are greatly outperforming the overall market, while others are underperforming and dragging down the overall group.

We took a look at the first five stocks yesterday, and today we want to dig a little deeper into the second half of the group and pinpoint which of these stocks are helping, and which are dragging down the overall group.

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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