One of the best ways to trade the New Year has been with the Dogs of the Dow.
Well, for most years…
This year, they weren’t so hot with the pandemic. However, if the virus begins to fade, that could change.
Historically, the Dogs do quite well.
They returned nearly 20% in 2019. In 2018, the Dogs eked out a 1% gain, as the Dow lost 5.6% for the year, according to Forbes.
In 2017, the Dogs of the Dow returned 19% for the year.
In 2016, the Dogs returned 16% on average. In 2015, they did okay, returning just 2.6%. In 2014, they returned 10.8%. In 2013, they returned about 35%. In 2012, 9.9%. In 2011, 16.3%. In 2010, 20.5%. And in 2009, they returned nearly 17%.
Better, they all paid out dividends, too.
While 2020 still has a few weeks left, here’s how the Dogs did this year so far.
· Dow Inc. (NYSE:DOW) – with a yield of 5.21% – ran from $50.42 to $53.86
· Exxon Mobil (NYSE:XOM) – with a yield of 4.97% — fell from $65 to $39.17
· IBM (NYSE:IBM) – with a yield of 4.81% — fell slightly from $129 to $125
· Verizon (NYSE:VZ) – with a yield of 4.11% – ran from $58.88 to $60.66
· Chevron (NYSE:CVX) – with a of 4.02% – fell from $115 to $88.68
· Pfizer Inc. (NYSE:PFE) – with a yield of 3.91% – ran from $35 to $40.39
· Walgreens (NASDAQ:WBA) – with a yield of 3.09% – fell from $56 to $38.88
· Cisco Systems (NASDAQ:CSCO) – with a yield of 2.95% – fell from $47 to $43.83
· Coca-Cola (NYSE:KO) – with a yield of 2.95% — fell from $53 to $52
This performance isn’t too shocking, though. Markets had one of their most volatile years on record. The crash that ended in March 2020 didn’t help. Looking forward to 2021, we could see higher highs, especially if the coronavirus dies off.
At the start of the year, investors will buy the highest yielding 10 Dow Jones stocks that fell out of favor the year prior. Invest an equal amount in each. Sell by year end. And repeat. To this day, it’s still one of the best buy and hold strategies.
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