For the first time in the four years that we have tracked the Dogs of the Dow strategy, 2017 has seen the strategy fail to keep pace with the overall market. Each time we have checked in with this year’s group of stocks that have lagged the overall market, but that has changed, and the group has pulled basically in-line with the overall Dow Jones at this point.
On the year, the Dow Jones has appreciated 11.2%, and the stocks in this year’s group of Dogs are currently showing a profit of 11.0%, including dividends.
While there is still plenty of time left before the end of the year, it now appears as though we could see another year where the Dogs of the Dow strategy is able to win versus the overall market.
For new readers, the Dogs of the Dow strategy involves buying an equal dollar weighted amount of each of the top ten yielding stocks in the Dow Jones at the start of the year, and holding those positions, regardless of performance, through the course of the year. The idea being that the stock’s yields rose so high because the underlying security was in oversold territory, and as investors bought into the perceived value in the stocks shares would rise and the group would collectively be able to outpace the overall market.
Let’s take a closer look at the stocks in this year’s group, and which are helping and which are dragging on the overall group.