Dogs Will Be Dogs

Below we highlight the performance of the Dogs of the Dow in 2008 along with the rest of the Dow 30 members as they stood at the start of the year. The Dogs of the Dow theory is to buy the ten highest yielding stocks in the Dow at the start of each year, and last year, C, PFE, MO, GM, VZ, DD, T, HD, JPM, and GE were the dogs. As shown, the average performance of the dogs so far in 2008 has been a decline of 41.95%.

All of the '08 dogs have turned out to be dogs once again, with not one gaining this year. General Motors and Citigroup have been the worst performers with declines of 85% and 76%, respectively. The ten lowest yielding stocks (opposite of the dogs) have actually averaged even bigger declines, but that is mainly because of AIG's 97% fall. The middle group of stocks in the Dow have done the best, with an average decline of 28%. The only two stocks in the index that are up on the year -- WMT and MCD -- are in this group.

While it didn't work out well last year, investors still might find it useful to know which Dow members are set to be the '09 dogs. At the moment, they are BAC, C, GE, PFE, AA, DD, T, VZ, MRK, and JPM.

Comments

[macsmart:]

None of those old aphorisms apply in this economic climate.

2008 Dec 22 07:02 PM

[BlueOkie:]

The article is premature. Let's see what happens on 1 Jan2009

2008 Dec 23 08:56 AM

[User 324892:]

The data for Citigroup in the above chart for 2009 Dogs of the Dow is incorrect. Citigroup is restricted from paying a dividend of more than one penny per share per quarter. Thus, if they pay the maximum dividend allowed under the terms of the deal with the government it would put the dividend yield at .57% not 8.91%. Citigroup will not be a member of the "Dogs of the Dow" for 09.

2008 Dec 23 01:51 PM