by Ian Cooper
One of the best year-end strategies to consider is the Dogs of the Dow.
At the start of the year, you simply buy the top 10 highest-yielding stocks on the most beaten-down stocks on the Dow Jones. And, or you can buy long-dated call options on each.
In 2022, the Dogs of the Dow lost 1.6%. However, if you add in the dividends each Dog paid out in 2022, the Dogs actually returned about 2% on the year, which was far better than the major indices. For 2022, the NASDAQ lost 33%. The S&P 500 lost 19%. The Dow Jones lost about 9%.
That’s not a shock, though.
The Dogs of the Dow typically do very well. 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%.
Here’s how the Dogs of the Dow did in 2022.
- Verizon started the year at $50.83 and closed at $39.40 – with a yield of 6.62%
- Dow Inc. started the year at $55.93 and closed at $50.39 – with a yield of 5.56%
- IBM started the year at $130.89 and closed at $140.89 – with a yield of 4.68%
- Chevron started the year at $115.25 and closed at $179.49 – with a yield of 3.16%
- Walgreens started the year at $51.14 and closed at $37.36 – with a yield of 5.14%
- Merck started the year at $75.29 and closed at $110.95 – with a yield of 2.63%
- 3M started the year at $174.85 and closed at $119.92 – with a yield of 4.97%
- Amgen started the year at $219.96 and closed at $262.64 – with a yield of 3.24%
- Coca-Cola started the year at $57.95 and closed at $63.61 – with a yield of 2.77%
- Intel started the year at $50.86 and closed at $26.43 – with a yield of 5.52%
While a 50% win-rate is nothing to write home about, the Dogs still beat the major indices, and still paid out dividends. We expect for the 2023 Dogs of the Dow to do even better.
Typically, you want to invest an equal amount of capital in each of these, and then cash out a year from now and then repeat. For 2023, the top Dogs include:
- Verizon (VZ)
- Dow Inc. (DOW)
- Intel (INTC)
- Walgreens (WBA)
- 3M (MMM)
- IBM (IBM)
- Amgen (AMGN)
- Cisco (CSCO)
- Chevron (CVX)
- JPMorgan Chase (JPM)
Here’s hoping for another solid year for the Dogs of the Dow 2023.