I’m not much of a ranter, but it doesn’t make any sense to me to continue to focus on dividends when there has clearly been a structural change in the market (that happened way back in 1982). (For newer readers there is background reading with lots of links at the end.)
Dogs of the Dow is simply to top ten stocks in the Dow sorted by dividend yield.
Flying Five further sorts those by lowest price.
Net Payout yield is the top ten Dow stocks sorted by net payout yield.
For the past 30 years or so the Dogs strategy has outperformed the DOW by ~ 3% per annum, and the Net Payout Yield strategy another 3% on top of that (ditto for Flying Five). All underperformed the Dow in 2007 but had monster years in 2006.
2008 is shaping up to be potentially the worst on record since 1972 for the Dogs and Flying Five strategies. Previous worst years are -8% and -15% respectively. Payout Yield is doing much better:
Dow: -10%
Dogs: -15%
Flying Five: -22%
Payout Yield: -6%
You can find the current payout yield stocks here. The top 10 right now are:
HD
PFE
MCD
IBM
DIS
T
GE
XOM
AA
BA
Flying Five (Link to original post here.)
Dogs of the Dow (Link to original post here.)
Net Payout Yield (Link to original post here.)
Assets and Defending Them.
