Dow 5 strategy
Search documents
Dogs of the Dow Beat the Market in 2025 — Here’s the Smarter 4-Stock Play for 2026
Yahoo Finance· 2025-12-25 14:50
Core Insights - The article discusses the effectiveness of the Dogs of the Dow investment strategy, which involves buying the top 10 highest-yielding dividend stocks from the Dow Jones Industrial Average and has historically outperformed the market [2][6]. Group 1: Investment Strategy - The Dogs of the Dow strategy was popularized by Michael O'Higgins in his 1991 book "Beating the Dow" and focuses on selecting high-yield dividend stocks for better returns [2][6]. - The strategy involves holding the selected stocks for one year, selling them, and then repeating the process, which has shown to deliver market-beating returns [2][3]. Group 2: Performance Analysis - In 2025, the Dow 5 stocks included Verizon, Chevron, Amgen, Johnson & Johnson, and Merck, with the Dow 5 portfolio returning 16.7% and the Dow 4 portfolio returning 20.7% [5]. - Verizon was the worst performer in the Dow 5 strategy, returning only 0.8% due to losing 289,000 postpaid phone subscribers in Q1 amid competition from T-Mobile and AT&T [6][7]. - The overall return of the Dow Jones Industrial Average was 14.5%, not including reinvested dividends, highlighting the relative success of the Dogs of the Dow strategy [7].