The 2017 Great Dogs of the Dow Experiment
Introduction:
The Dogs of the Dow is a pretty popular investment strategy built around selecting the ten stocks whose dividend yield is the highest out of the thirty stocks that comprise the DJIA. You can read all about it on the wikipedia page if you feel so inclined. This strategy has been heavily debated in the past and I’m not here to talk about the pros and cons. I’m only here to talk about the THE NOOBS GREAT DOGS OF THE DOW EXPERIMENT.
What is the Great Dogs of the Dow Experiment? It’s where I put $500 dollars down on the dogs and see how it fairs at the end of the year— with one caveat.
- I already own KO and won’t be buying more. I’ll be picking the 11th place Dog of the Dow stock in its place!
You might be asking: Why only $500? It’s true that $500 doesn’t give you many shares of some of these companies but the idea will be the same. The challenge is to see if they will beat the index for the year. They’re all good quality stocks, so I’m not too worried about it on the long term. At the end of the year, I’ll see how they progressed and add positions to the stocks that are in the new Dogs of the Dow list. I debated on swapping them out versus keeping them and decided that I’ll just keep them in the portfolio. Sounds Easy enough.
Historically, the Dogs have been doing pretty good when compared to the overall index.
Courtesy: http://www.dogsofthedow.com/doggish.htm
The highest return of the chart is what they deem the “Small Dogs” or the bottom five stocks in the top 10.
Below is the current list of DOGS as of 12/31/16.
Current Dogs of the Dow
| Symbol | Company | Sector | Yield |
| VZ | Verizon | Technology | 4.30% |
| PFE | Pfizer | Healthcare | 3.94% |
| CVX | Chevron | Basic Materials | 3.65% |
| BA | Boeing | Industrial Goods | 3.60% |
| CSCO | Cisco Systems | Technology | 3.41% |
| KO | Coca-Cola | Consumer Goods | 3.37% |
| IBM | International Business Machines | Technology | 3.36% |
| XOM | ExxonMobil | Basic Materials | 3.31% |
| CAT | Caterpillar | Industrial Goods | 3.27% |
| MRK | Merck | Healthcare | 3.16% |
As I said before, I’ll be swapping out KO with another stock – in this case it’ll be PG. I made the following purchases:
| 3 shares of IBM @ 165.90 | 5 shares of CAT @ 92.80 |
| 9 shares of MRK @ 58.80 | 15 shares of PFE @ 32.50 |
| 6 shares of PG @ 84.05 | 3 shares of BA @ 155.78 |
| 17 shares of CSCO @ 30.20 | 10 shares of VZ @ 53.40 |
| 5 shares of XOM @ 90.40 | 4 shares of CVX @ 117.65 |
These 10 stocks add $149.18 to my annual income.
Let’s see how the next year folds out with a new president as well as the market hitting all time highs. It’s always exciting for a new investor to get into new stocks and this experiment will be fun. I’ll be giving progress reports for the stocks quarterly as well as doing some basic due diligence on the 2017 Dogs of the Dow in the coming weeks.