What are the Dogs of the Dow?

According to the Dogs of the Dow theory if you were to pick 10 stocks with the highest dividend yields from the Dow Jones Industrial Average (DJI) at the beginning of the year and hold them until the end of the year, your average returns over a period of time should be higher than the returns of the entire Dow Jones Industrial Average (DJI). This proven theory has strong parallels with value investing principles and could be considered a value investing approach with all the guesswork taken out of it. The DJI consists of 30 of the largest and most widely held public companies and you can view the entire DJI list here.

While writing this blog post about the year-to-date performance of the Dogs of the Dow, it took me much longer to look up the current price and compute the percentage change for each of the ten dogs than to actually write the rest of the post. I figured it would be helpful to build a page that computes the returns from the dogs of the dow automatically every time you visit that page. We have already done something similar for our model portfolio and we decided to extend that idea to this page.