Every year, one of the best strategies is the Dogs of the Dow.
You simply buy a basket of underperformers on the Dow that pay dividends, and sell by the end of the year. While the 2024 Dogs of the Dow didn’t do so well, you still had the opportunity to collect respectable yields along the way.
Plus, in most years, the Dogs do pretty well.
The 2023 Dogs of the Dow returned an average of 10.1%, which came in below the 14.4% return on the Dow Jones’ Industrials. Still, with the appreciation in most of the 2023 Dogs coupled with dividends, investors still did well overall.
The 2022 Dogs of the Dow beat the major indices, even in a rough year. In fact, while the Dogs of the Dow stocks fell 1.6% on the year, once you add in the dividend payouts, the Dogs returned 2% on the year. And while 2% may not sound like a big win, consider that, in 2022, one of the worst years on record since 2008, the NASDAQ lost 33%. The S&P 500 lost 19%. The Dow Jones lost about 9%.
In 2021, the Dogs of the Dow returned about 16.3%. While 2020 wasn’t a great year for the Dogs, most other years have done very well. In 2019, the Dogs were up 20%. In 2018, they were up about 1%, but still beat the Dow, which fell close to 6%. In 2017, the dogs were up 19%. In 2016, they were up 16%.
Now, as we get into 2025, some of the top Dogs of the Dow to buy and hold include:
- Verizon (VZ), which yields 6.78%
- Chevron (CVX), which yields 4.5%
- Johnson & Johnson (JNJ), which yields 3.43%
- Amgen (AMGN), which yields 3.65%
- Merck (MRK), which yields 3.26%
- Coca-Cola (KO), which yields 3.12%
- IBM (IBM), which yields 3.04%
- Cisco (CSCO), which yields 2.7%
- McDonald’s (MCD), which yields 2.44%
- Procter & Gamble (PG), which yields 2.4%
We will be watching these stocks closely, so keep an eye on your inbox.
Sincerely,
Ian Cooper
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