For income investors, dividend strategies don’t come any easier than the “Dogs of the Dow.”
But does this simple technique still work?
We’ll look at the 2021 Dogs, and their attached dividends (and prospects) in a moment. Their yields aren’t too shabby, averaging 4.1% in a 1% world! First, let’s review the mechanics of the popular contrarian strategy:
- Step 1: After the final trading day of the year, we identify the 10 highest-yielding stocks in the Dow.
- Step 2: We buy all 10 in equal amounts.
That’s it. In just a couple of quick steps, executed just once every year, we can put together a mini-portfolio of 10 blue-chip stocks that typically out-yield the S&P 500, and currently offer 2.5 times more dividends than the broad market index.… Read more