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 The dividends that flow through can be put in *DRIP Mode 365 or can be withdrawn as monthly income.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.