The Dogs of the Dow -- A Stock Investment With More Income

by Ernesto R. Martin

The Dogs of the Dow is a stock investment for those who would like their investment to generate more income. The Dow Jones Industrial Average (DJIA), or simply The Dow, is an index, reported daily in the news, which measures the value of 30 blue-chip stocks selected each year to be representative of the U.S. large-corporation stock market. The Dogs is an investment strategy optimizing towards DJIA stocks that pay high dividends relative to their stock price (but the strategy may also beat the market, as it did over the period from 2008 to 2018, when a $10,000 investment became $21,420 for The Dogs vs $17,350 for the DJIA; see link below). The general concept is to allocate money to the 10 highest dividend-yielding stocks among the 30 components of the DJIA and re-balancing at the beginning of each calendar year. It sounds complicated but it isn't, partly because the strategy and the stocks that you need to buy are found on the Internet, including this site. For those wanting more income from their stocks, my recommendation is that they put some money in an S&P 500 index fund and some in the Dogs of the Dow.