The last time we checked in on this year’s Dogs of the Dow, the group of stocks were trailing the overall Dow Jones by just 0.6%, but over the last month the stocks have appreciated less than the overall market.
With recent gains in the market, the Dow Jones is currently up 22.3% on the year. The ten stocks in this year’s Dogs of the Dow, have appreciated, on average by 18.8%.
There are a couple of major positive outliers in this year’s group, but just three of the ten stocks are currently outpacing the overall market. While the three outliers are keeping the group close to the market, the remainder of the stocks are pulling down the overall average, and could make this the first year in the last four that we have tracked the strategy that it falls to beat the overall market.
For our readers that are new to the Dogs of the Dow strategy, the basic idea is that investors would buy an equal dollar weighte amount of the top ten yielding stocks in the Dow Jones at the beginning of the year, and holding those positions for the entire year regardless of individual performance. The reasoning behind the strategy is that the stock’s yields have risen so high because the underlying security has fallen into oversold territory, and as the stocks trade up to fair value they will appreciate faster than the overall market.
Let’s take a closer look at each of the ten stocks in this year’s group to see which are outperforming the market, and which are dragging down the overall group.