Dogs of the dow

[Hklm8383]

Sorry if this is not the right forum. I used search and i could not find a topic on the subject.

So my best friend father invested like 100k in the dog of the dow and he keep telling me how good it is and stuff. He tell me it is so safe and blabla.

here is a quote from the website :

Looking for a simple way to select high dividend yield Dow stocks for your investment portfolio? Try Dogs of the Dow. Read on and you will discover a technique that would have given you a 17.7% average annual return since 1973!

http://www.dogsofthedow.com/

Now i am asking myself how something supposely that simple could be so lucrative on the long run and why isnt everyone doing it. So here is my question. Is that stuff safe and anyone doing it ? thx for the help.

[Cubswin]

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.***

[cecil]

this strategy became widely known in 1991 when mike o'higgins' book "beating the dow" was published. since 1992 the annual return for the dogs has underperformed the djia by approximately 100 basis points. prior to 1992 the dogs outperformed by approx 600 bps.

[ilikeaces86_]

Its a decent strategy. Dividend stocks do usually return better than non dividend stocks over time.

[jively]

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Its a decent strategy. Dividend stocks do usually return better than non dividend stocks over time.

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