One of the best end-of-year strategies is the Dogs of the Dow.
You simply buy 10 of the worst performing Dow stocks, which also carry dividends. By year end, you’ll cash out, and then play the next batch of Dogs of the Dow.
In 2023:
- Verizon (VZ) – which has a current yield of 6.95% — ran slightly from about $38 to $28.25
- Dow Inc. (DOW) – with a yield of 5.5% — jumped slightly from $49.99 to $50.92
- Intel (INTC) – with a yield of 1.17% – ran from $26.72 to $42.70
- Walgreens (WBA) – with a yield of 8.29% – fell from about $37 to $23.16
- 3M (MMM) – with a yield of 5.8% – fell from about $120 to $103.37.
- IBM (IBM) – with a yield of 4.1 % – ran from $140 to $161.96
- Amgen (AMGN) – with a yield of 3.17% — ran from about $258 to $269.12
- Cisco (CSCO) – with a yield of 3.22% — jumped from about $47.48 to $48.38
- Chevron (CVX) – with a yield of 4.19% — fell from about $176 to $144.31
- JPMorgan Chase (JPM) – with a yield of 2.65% — ran from about $134 to $158.52
Seven out of 10 winners, with dividends to boot. Not bad at all.
The 2022 Dogs of the Dow beat the major indices, even in a “ruff” year. In fact, while the Dogs of the Dow stocks fell 1.6% on the year, once you add in the dividend payouts, the Dogs returned 2% on the year.
And while 2% may not sound like a big win, consider that, in 2022, one of the worst years on record since 2008, the NASDAQ lost 33%. The S&P 500 lost 19%. The Dow Jones lost about 9%. That 2% doesn’t look so bad now, does it?
In 2021, the Dogs of the Dow returned about 16.3%. While 2020 wasn’t a great year for the Dogs, most other years have done very well. In 2019, the Dogs were up 20%. In 2018, they were up about 1%, but still beat the Dow, which fell close to 6%. In 2017, the dogs were up 19%. In 2016, they were up 16%.
As for the year ahead, the top 10 Dogs of the Dow to consider are Amgen (AMGN), Coca-Cola (KO), Cisco (CSCO), Goldman Sachs (GS), IBM (IBM), Chevron (CVX), Dow (DOW), 3M (MMM), Verizon (VZ), and Walgreens Boots Alliance (WBA).
Buy, hold, wait, and enjoy.
