Dog of the Dow “20% a year” strategy:
At the beginning of the new year, buy equal amounts of the 10 stocks within the Dow Jones 30 which have had the highest dividend yield in the preceding year. Hold for 12 months and sell at the end of the year.
Below are the Dogs of the Dow for the year 2011, based on their dividend yeild (shown below) in 2010 – the stocks are listed in order of their current market price (lowest to highest):
Pfizer (PFE) – 4.37% (dividend yield)
AT&T (T) – 6.02%
Kraft (KFT) – 3.83%
Verizon (V) – 6.05%
Merck (MRK) – 4.37%
Dupont (DD) – 3.54%
Procter & Gamble (PG) – 3.11%
Johnson & Johnson (JNJ) – 3.47%
MacDonald’s (MCD) – 3.11%
Chevron (CVX) – 3.51%
Tip: Before you buy them, you may first want to consider the technical aspects of each stock to decide if the stock is currently in an upward trend, or at least showing signs of “bullishness”.