We have tracked the Dogs of the Dow strategy for the last four years, with 2017 being the first year since we started following the group that the strategy has underperformed the overall market.
The stocks in this year’s group have failed to keep pace with the overall Dow Jones all year, but the group did make a good charge at the end of the year to almost beat the overall market for yet another year.
It was an amazing year for the market as a whole, with the Dow Jones consistently hitting new highs, and closing out the year with a gain of 24.2%. The stocks in this year’s Dogs of the Dow group finished out the year up 23.1% including dividends.
To illustrate just how powerful dividends are to a portfolio’s overall performance, if we backed out the gains associated with the dividends that were paid during the year, the ten stocks in this year’s group would have appreciated just 19.4%.
There were a couple major outliers in this group, but only three stocks were able to outpace the overall market. Four of the ten stocks ended the year in the red and prevented the strategy from enjoying another successful year. Let’s take a closer look at the stocks, and which were able to bring the group close to break-even with the broader market.