Re: Dogs of the dow
You can take just about any investment strategy then go back in time to make it look like a winner... or a loser for that matter. Graham looked at this stategy for a time period of 1968-71 and the results 'proved quite disappointing'. He continues, "This one bad instance should not vitiate conclusions based on 30-odd experiments, but its recent happening gives it a special adverse weight. Perhaps the aggresive investor should start with the 'low-multiplier' idea, but add quantitative and qualitative requirements thereto in making up his portfolio."
Basically, 'the dogs of the dow' is a good place to start looking for value stocks, but you definitely need to look at the funadamentals and worthiness of each individual stock. There will be winners and losers on the 'dogs' list and only sound research will put you on the winners.
*** I am very much a student when it comes to investing so someone please feel free to clear up anything I misunderstand or misstate.***
|