Business and Personal Finance Dictionary

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• DOGS OF THE DOW
  
  If you follow a Dogs of the Dow investment strategy, you buy the 10 highest-yielding stocks in the Dow Jones Industrial Average (DJIA) on the first of the year and hold them for a year. Then, on the anniversary of your purchase, you sell that portfolio and buy the next batch of dogs. According to this theory, the dogs will, over the year, produce a total return that's higher than the return on the DJIA as a whole. The hypothesis is that when investors buy stock for its high yield, demand for that stock increases, so the price tends to rise. When the year is up, and the stock is no longer a dog because its higher price reduces its current yield even if the dividend ramains the same. So you sell it. When you do, you'll get a higher price than you paid, plus the dividends you collected, producing a strong total return.
  
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