2010 Dogs of the Dow Update

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 |  Includes: BA, CVX, DD, HD, MCD, MDLZ, MRK, PFE, SPY, T, VZ
by: David I. Templeton, CFA

One investment strategy that seems to get quite a bit of press is the "Dogs of the Dow" strategy. This strategy consists of selecting, after the close of business on the last trading day of the year, the ten stocks which have the highest dividend yield from the stocks in the Dow Jones Industrial Index. Once the ten stocks are determined, an investor would invest an equal dollar amount in each of the ten stocks. The strategy has had mixed results over the years.

With the year coming to an end, it does appear the 2010 Dow Dogs will outperform the Dow Jones Industrial Index. Additionally, the Dow Dogs are maintaining a narrow performance edge over the S&P 500 Index. On a price only basis, the YTD return for the S&P 500 Index is 12.77% and the S&P's total return equals 15.03%.

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From The Blog of HORAN Capital Advisors
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Source: Dogs of the Dow

As of the market's close last Thursday, the below table contains the list of stocks that are in the running to make up the Dow Dogs list in 2011.

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From The Blog of HORAN Capital Advisors
Click to enlarge