The Dogs of the Dow Theory
There is a theory that if you choose 10 stocks at the beginning of the year that have the highest dividend yields from the Dow Jones Industrial Average (DJI), then hold them until the end of the year, you will have returns that are higher than the returns of the entire Dow Jones Industrial Average (DJI). This is called the Dogs of the Dow theory and it has been proven to work. This year the 10 dogs of the Dow include Pfizer, Verizon (VZ), Altria (MO), AT&T (T), Citigroup (C), Merck (MRK), General Motors (GM), DuPont (DD), General Electric (GE) and JP Morgan Chase.
Of course, you can also use the Internet to pick your own Dogs of the Dow stocks for in your personal portfolio. Thankfully, this is actually quite easy to do because there are numerous web sites out there today that have been created to help you choose the stocks that are right for you.
Traditionally, the Dogs of the Dow are selected on January 1st of each year. However, you do not have to wait until the new year to start your portfolio. Plus, since these stocks have become so popular you probably are better off purchasing these stocks at some other date than the beginning of the year. In this way you will be able to save money so that your returns can be even greater.