A few years back there was a movie, "All dogs go to heaven." As the year winds down, I was thinking about the popular "dogs of the Dow" strategy. The basics are to buy the highest yielding Dow 30 stocks.
Over the years this has proven to be a good strategy. However, like almost all strategies, there are losing years. 2008 was one of them. Barrons reports that buying the 10 "dogs" of the Dow would have resulted in a 42% loss. The article says beginning of 2007, but traditionally the strategy is done year-to-year, so there is a chance that it may be a typo and they mean beginning of 2008.
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At the beginning of 2007, the elite kennel included Citigroup , Pfizer , Altria , General Motors , Verizon Communications , DuPont , AT&T , Home Depot , JPMorgan Chase and General Electric , with yields ranging from 3.10% to 7.34%. Collectively, those dogs were sure barking up the tree and, as of last week, were off nearly 42%.
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