Dogs of the Dow Investment Strategy
The Dogs of the Dow is a stock investing strategy popularized by Michael B. O’Higgins in his 1991 book, Beating the Dow. For more about the Dogs of the Dow (and Puppies of the Dow), I recommend reading his 2011 revised edition of the book. I’m going to go over his 3 main strategies discussed in his 2011 revised edition.
Here is the Dogs of the Dow 2021 List
|IBM||IBM Common Stock||5.18%|
|WBA||Walgreens Boots Alliance Inc||4.69%|
|VZ||Verizon Communications Inc.||4.27%|
|CSCO||Cisco Systems, Inc.||3.24%|
|MRK||Merck & Co., Inc.||3.18%|
Check out the past Dogs of the Dow that I’ve been tracking since 2019.
Strategy #1: Dogs of the Dow
Buy equal amounts of the 10 Dogs of the Dow stocks the first trading day of the year. Each subsequent year, re-balance into equal amounts of that new year’s Dogs of the Dow stocks.
Strategy #2: Puppies of the Dow
Instead of buying the 10 Dogs. Buy the 5 lowest priced of them. In 2020, that would be:
- Walgreens Boots Alliance, Inc. (WBA)
- Cisco Systems, Inc. (CSCO)
- The Coca-Cola Company (KO)
- Dow Inc. (DOW)
- Verizon Communications (VZ)
Strategy #3: Penultimate Profit Prospect (PPP)
Buy the second lowest-priced of them. The 2021 PPP is Cisco Systems, Inc. ($44.82).
I don’t currently use any of the Dogs of the Dow strategies, but I am fascinated by them. I use the Dogs of the Dow more as a screen to find potentially undervalued stocks.
I/we own shares of stock in KO
Except for Wolves of Investing, I/we are not receiving any compensation from and do not have any business dealings with any companies discussed in this article.
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Donnie Nguyen is the founder and CEO of Wolves of Investing. He started investing in the stock market in the early 2000s. He follows the teachings of Peter Lynch, Warren Buffett, and other investing legends. When he's not investing or blogging, he loves spending time with his family traveling and experiencing the world.
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