Dogs of the Dow - 'Dogs of the Dow Strategy Won in 2010 Can...

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'Dogs of the Dow' Strategy Won in 2010. Can It Repeat in 2011? Wall Street Journal - JANUARY 3, 2011 As the calendar turns from 2010 to 2011, it is time again for investors to start snapping up the 10 highest-yielding components of the Dow Jones Industrial Average. The strategy, known as "Dogs of the Dow," says to buy the 10 Dow components with the highest yields with hopes of getting more dividend income and seeing the past year's laggards outperform. Outside of increased dividends, yields rise when stock prices fall and so the Dogs strategy aims to capitalize on that dynamic. It hasn't always been fortuitous; investors in the strategy would have gotten a smaller return over the past decade than they would have gotten by investing in all 30 of the Dow's components over the period. Yet the Dogs concept has a significant following that never seems to abate, due in part to its strength during certain periods. It outperformed during the bear market of 2000 to 2002, and it beat the broader market for 2010. The Dogs stocks climbed 15.5% this past year, excluding dividend income, surpassing the Dow's 11% increase. Including dividend income, the Dogs had a total return of nearly 21% this past
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This note was uploaded on 09/22/2011 for the course RSM 330 taught by Professor Stapleton during the Spring '11 term at University of Toronto.

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Dogs of the Dow - 'Dogs of the Dow Strategy Won in 2010 Can...

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