2011 Dow 10 Strategy

This time around these investors are going to be more conservative and not chase the sexy growth stocks that capture most of the headlines. Fortunately for them there are scores of great dividend stocks available with which to build a stable portfolio. Even more fortunate for them is that dividend stocks have tended to outperform the broader market indices.

A study originally done by John Slatter in the 1980’s focused on the “dogs of the Dow” and their unusually high performance. The Dow 10 strategy as it is known states that those investing in the 10 highest yielding stocks in the Dow Jones index tend to outperform the overall market. This includes outperforming the Dow Jones index and the broader S&P 500 index. From 1928-1997, the Dow 10 strategy produced annual returns of 13.2% compared to only 10.6% from the S&P 500.

Source: eDividendStocks

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