A simple strategy: buy the top yields, hold one year, rebalance. ͏
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[Morning Watchlist]
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-------------------------
THESE ARE THE DOGS OF THE DOW FOR 2026
Every year, one of the simplest—and most widely followed—dividend
strategies is the DOGS OF THE DOW.
The concept is straightforward: BUY AN EQUAL-WEIGHT BASKET OF THE 10
HIGHEST-YIELDING STOCKS IN THE DOW JONES INDUSTRIAL AVERAGE AT THE
START OF THE YEAR, COLLECT DIVIDENDS, THEN REBALANCE INTO THE NEW LIST
THE FOLLOWING YEAR.
The underlying logic is equally simple. A high dividend yield is often
the result of a DEPRESSED STOCK PRICE rather than a suddenly generous
dividend. The “Dogs” approach is essentially a contrarian bet that
blue-chip laggards will stabilize, recover, or at least stop getting
worse—while paying you to wait.
Before we get into the 2026 list, it’s worth highlighting one
important point: the Dogs don’t “win” every year. But they can
be particularly attractive when (1) investors are more
valuation-sensitive, (2) income matters again, and (3) market
leadership broadens beyond a narrow set of high-growth names.
-------------------------
HOW THE DOGS PERFORMED IN 2025 (THE SETUP FOR 2026)
In 2025, the Dogs had a strong year.
Using year-end data, the Dogs of the Dow (as selected on 12/31/2024)
posted a +15.0% PRICE RETURN in 2025, compared with +13.0% for the Dow
30 and the DJIA itself on a price basis.
A few standouts helped carry the basket:
*
JOHNSON & JOHNSON: +43.1% in 2025 (price change)
*
IBM: +34.7%
*
CISCO: +30.1%
*
AMGEN: +25.6%
And importantly, ONLY ONE of the 2025 Dogs finished negative on a
price basis:
*
PROCTER & GAMBLE: -14.5%
When you add dividends, the gap can look even better. One analysis
calculated the Dogs’ 2025 TOTAL RETURN AT ~18.9%, ahead of the DJIA
and roughly in line with or better than major benchmarks depending on
the measurement window.
That matters for 2026 because strong performance in one year often
reshuffles the list. Winners tend to see yields compress (prices rise
faster than dividends), and laggards tend to rotate in.
-------------------------
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-------------------------
THE OFFICIAL DOGS OF THE DOW LIST FOR 2026
The OFFICIAL 2026 DOGS OF THE DOW are the 10 highest-yielding Dow
components based on the CLOSE OF DECEMBER 31, 2025.
Here is the 2026 list (yields are from the end of the year):
*
VERIZON (VZ) — 6.78%
*
CHEVRON (CVX) — 4.49%
*
MERCK (MRK) — 3.23%
*
AMGEN (AMGN) — 3.08%
*
PROCTER & GAMBLE (PG) — 2.95%
*
COCA-COLA (KO) — 2.92%
*
UNITEDHEALTH (UNH) — 2.68%
*
HOME DEPOT (HD) — 2.67%
*
NIKE (NKE) — 2.57%
*
JOHNSON & JOHNSON (JNJ) — 2.51%
A quick observation: compared to 2025, UNH, HD, AND NKE are the
notable additions—each reflecting meaningful 2025 price weakness
that pushed yields higher.
THE “SMALL DOGS” ANGLE (OPTIONAL BUT WIDELY FOLLOWED)
A common variation is the SMALL DOGS OF THE DOW: the five Dogs with
the LOWEST SHARE PRICES at selection time, which some investors use as
a tilt toward deeper value. On 12/31/2025, those were: VZ, MRK, PG,
KO, AND NKE.
-------------------------
_Stansberry Research_
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-------------------------
WHY THE DOGS CAN WORK (AND WHY THEY SOMETIMES DON’T)
The strategy is popular for a reason: it’s rules-based, transparent,
and easy to execute.
WHY IT CAN OUTPERFORM:
*
MEAN REVERSION: blue-chip laggards often recover when the market stops
punishing them.
*
DIVIDEND SUPPORT: yield can cushion drawdowns and reduce the
“need” to time the market perfectly.
*
VALUATION DISCIPLINE: by construction, you’re often buying stocks
that are cheaper than their peers.
WHY IT CAN UNDERPERFORM:
*
VALUE TRAPS EXIST. A high yield can signal genuine business
deterioration.
*
SECTOR CONCENTRATION RISK. Some years the Dogs become overloaded in a
few sectors (e.g., energy/healthcare/consumer).
*
DIVIDEND RISK. If a company cuts its dividend, the key pillar of the
strategy breaks.
This mixed track record is well documented. Investopedia notes Dogs of
the Dow returns can be close to the DJIA over long periods, but
performance varies materially depending on the timeframe studied. And
recent years provide a perfect example: Barron’s reported that the
2024 DOGS MATERIALLY LAGGED broader markets, even though 2025 then
proved strong.
HOW TO IMPLEMENT THE 2026 DOGS STRATEGY
If you want to keep it pure and rules-based, the classic approach
looks like this:
*
AT THE START OF 2026, buy the 10 Dogs IN EQUAL DOLLAR AMOUNTS.
*
HOLD FOR ONE YEAR, collecting dividends.
*
AT YEAR-END (LATE 2026 / EARLY 2027), rebalance into the next Dogs
list.
PRACTICAL GUARDRAILS
To keep the strategy from turning into a headache:
*
Rebalance ONCE per year (don’t overtrade it).
*
Treat it as a BASKET strategy—avoid “falling in love” with one
Dog.
*
Use position sizing that reflects the fact that Dogs can be
equity-volatile even with dividends.
-------------------------
_Mining Stock_
STOCK ALERT :
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-------------------------
_Have you ever had luck with this or similar seasonal trading
strategies? Which ones do you think are best? What other sectors of
the market are you currently interested in? Hit "reply" to this email
and let us know your thoughts!_
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