Does a “Dogs” investment strategy make sense?

Buying the market’s “Dogs” – top-ten high yielders – every year is a popular strategy, but does it make sense?

911_MW_P15_Strategy

The Dogs strategy leaves you with stocks that are too similar
(Image credit: Credit: GROSSEMY VANESSA / Alamy Stock Photo)

One of the most straightforward and widely known investment strategies is the "Dogs of the Dow", based on a book published in 1990 called Beating the Dow by Michael O' Higgins. After the market closes on the last day of the year, buy equal dollar amounts of the Dow Jones index's ten highest-yielding companies. Hold on to them for a year, and then repeat the process.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.