Dow Dogs Were Dogs in 2008, What About 2009?

With the close of 2008, we can now review the performance of the Dogs of the Dow. The Dogs of the Dow is an investing strategy where one invests in the ten highest yielding stocks in the Dow Jones Industrial Average as of the last trading day of the prior year.

The performance of the Dow Dogs in 2008 was -41.6% versus the Dow Jones Index performance of -36.9%. Over recent years, the Dogs of the Dow strategy has been mixed.

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The Dow Dogs for 2009 are detailed below. New members include Bank of America (BAC), Alcoa (AA), Merck (MRK) and Kraft (KFT). Those companies that were dogs in 2008 and are dropped from the 2009 list are Citigroup (C), General Motors (GM), Altria (MO) and Home Depot (HD).

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Source: Dogs of the Dow

Comments

[Moon Kil Woong:]

I would think the market would have factored in this strategy. If it wasn't adjusted for everyone would be doing it eroding the deal to the point were it would be parity with the rest of the market or worse. Personally, I would lean towards worse. Citibank and GE should be about 0. Thanks to government support they live. JP Morgan may be no better in 2009 if things get much worse. BofA is buying crap only because they got free money from TARP and got government support.

At least if you use this strategy you won't be saddles with Home Depot this year. What a sigh of relief. I suggest people actually screen what they invest in rather than playing silly strategies like buy all the products you buy for your home etc. It's tedious but it's oooh so worth it.

Anyway, thanks for the chart and strategy information. Even though I won't trade it, I like a good snicker once and a while.

Here's a strategy, find all the stocks Bernie Madoff bought last year and short them. Then go equally long the rest of the S&P 500. I'm sure once they track everything down and start liquidating it won't be a positive relative to this index.

The question now is what did he own and where's the money. I suggest you start asking his family members who happen to trade in the same building but strangely said they had nothing to do with them. Rigggghhhtttt....

And why should we believe Madoff who says that's absolutely true. Dude... you're wearing a tracking sensor. I would tend to believe the opposite of everything you say... What a con (use any term of that word you want).

Jan 02 04:43 AM

[BlueOkie:]

Good reflection on the Dogs! Goes to show no one strategy works all the time. If investing were simple everyone could do it. Do it well that is.

Jan 02 08:33 AM

[citypound:]

I think you mean GM not GE in the opening paragraph

On Jan 02 04:43 AM constructe wrote:

> I would think the market would have factored in this strategy. If
> it wasn't adjusted for everyone would be doing it eroding the deal
> to the point were it would be parity with the rest of the market
> or worse. Personally, I would lean towards worse. Citibank and GE
> should be about 0. Thanks to government support they live. JP Morgan
> may be no better in 2009 if things get much worse. BofA is buying
> crap only because they got free money from TARP and got government
> support.
>
> At least if you use this strategy you won't be saddles with Home
> Depot this year. What a sigh of relief. I suggest people actually
> screen what they invest in rather than playing silly strategies like
> buy all the products you buy for your home etc. It's tedious but
> it's oooh so worth it.
>
> Anyway, thanks for the chart and strategy information. Even though
> I won't trade it, I like a good snicker once and a while.
>
> Here's a strategy, find all the stocks Bernie Madoff bought last
> year and short them. Then go equally long the rest of the S&P
> 500. I'm sure once they track everything down and start liquidating
> it won't be a positive relative to this index.
>
> The question now is what did he own and where's the money. I suggest
> you start asking his family members who happen to trade in the same
> building but strangely said they had nothing to do with them. Rigggghhhtttt....
>
>
> And why should we believe Madoff who says that's absolutely true.
> Dude... you're wearing a tracking sensor. I would tend to believe
> the opposite of everything you say... What a con (use any term of
> that word you want).
>

Jan 02 10:39 AM

[Mike Lewis:]

Blindly investing in these stocks at the beginning of the years is, to be sure, a crap shoot. An additional plan needs to be used in accordance to assure long term success. The advantage of the higher dividends is good, and historically stocks that paid those dividends consistently over the years not only outperformed the market, but were safer than average. After all, we're working with odds here. The other thing we can say about these stocks is, good or bad, as a group, they have long-term volatility, which plays well into a strategy called AIM, originally written about by Robert Lichello.

Jan 02 11:46 AM

[richbee:]

Then again, you could just be an obtuse fool blinded by fear!!!

Ooops???

Miss the VALUE???


On Jan 02 11:46 AM Mike Lewis wrote:

> Blindly investing in these stocks at the beginning of the years is,
> to be sure, a crap shoot. An additional plan needs to be used in
> accordance to assure long term success. The advantage of the higher
> dividends is good, and historically stocks that paid those dividends
> consistently over the years not only outperformed the market, but
> were safer than average. After all, we're working with odds here.
> The other thing we can say about these stocks is, good or bad, as
> a group, they have long-term volatility, which plays well into a
> strategy called AIM, originally written about by Robert Lichello.

Jan 03 03:27 AM