Dogs of the Dow Investment Strategy
A Classic Strategy for Today’s World!
About this Dogs of the Dow Portfolio
Our financial advising will choose 10 of the highest dividend yielding blue chip stocks in the Dow Jones Industrial Average. The Dow Jones Industrial Average aka “The Dow” are the 30 largest publicly owned companies on the NYSE and NASDAQ.
Dogs of the Dow Portfolio Requirement
Dogs of the Dow relies on the premise that blue-chip stocks do not alter their dividend to reflect trading conditions and, therefore, the dividend is a measure of the average worth of the company. In contrast, the stock price fluctuates throughout the business cycle. This means companies with a high dividend relative to stock price are near the bottom of their business cycle, so their stock price likely would increase faster than companies with low dividend yields. In this scenario, an investor reinvesting in high-dividend-yielding companies annually should outperform the overall market. Our financial advising firm will focus on companies with market capitalization north of $100B.
Dividends and cash flow is of extreme importance to this investment strategy. The dividends that flow through can be put in *DRIP Mode 365 or can be withdrawn as monthly income. *DRIP Mode 365 means I, Virtual Dan, will make sure that when your dividend gets paid – we will reinvest that dividend in the very same stock for additional shares!
For example, companies like Johnson and Johnson (JNJ) with a 2.88% dividend payer could be a portion of the portfolio, while the objective is certainly growth sometimes companies will also pay dividends.
Did you know that the difference on a $1000 one-time investment in a stock portfolio from 1925 to 2018 would be $6,123,561 total value today with dividends being reinvested versus only a total value of $206,044 had you not reinvested the dividends? Yikes! Dividends pay well over time. Slow and steady wins the race here.