A study by hirschey hirschey m 2000 the dogs of the

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Unformatted text preview: n. A study by Hirschey (Hirschey, M., 2000, The “Dogs of the Dow” Myth, Financial Review, v35, 1-15.) in 2000 also indicates that there are no excess returns from this strategy after you adjust for risk. 22 2. Why would ten of the most highly followed stocks in the world be so seriously misvalued by investors? In other words, why are other investors not seeing the same opportunities that you do in these stocks? 3. Many of the stocks on this list have at least one big concern weighing them down – Altria (the former Philip Morris) has tobacco lawsuits and J.P. Morgan Chase faced legal problems associated with Enron. Will these companies continue to pay their dividends if these concerns turn into financial liabilities? You may very well conclude that the reward is worth the risk, but that should not be a conclusion made in haste and without analysis. Dividend Increases In a different version of the dividend story, stocks that have increased their dividends over time are viewed as better investments than stocks than stocks than stocks where dividends have been stagnant or...
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