Ruff up your stock strategy by running with the Dogs of the Dow investment strategy

The Dogs of the Dow stock strategy is one of the most proven stock strategies that continues to work year after year for those who are not too familiar with the stock market or those that are simply in the know. Based on hard facts, the strategy enables those that lack the time to learn the stock market or those who are simply new to the exchange a way to safely invest and see returns every year.

The basic Dogs of the Dow strategy is centered on the Dow Jones Industrial Index hence the name of the tactic. In order to follow it, every year you should look at the ten lowest performers on the top 30 Dow performing stocks for the past year with high dividend yields and invest in them.

While the idea of investing in the ‘dogs’ of the stock market may seem counterproductive, keep in mind that the they are still within the top 20 Dow stocks which means that they are strong historically which means that you are picking the worst from the cream of the crop which softens the blow a little.

The basic concept is that the stocks will bounce back while you hold an investment making your initial stock shares less expensive but the price you end up selling them at much higher, in other stock terms yielding you a positive return on your investment. In order to make sure that the Dogs of the Dow shows you the maximum return however it is important to keep in mind that you must invest equally in each of the ten stocks and not favor one over the other because if you do you are still taking a gamble and thus abandoning the strategy and the proposed returns.

While this may seem farfetched, those who invested following the Dogs of the Dow saw a return of around 18% which has held pretty constant historically. Although there are no guarantees in the stock market, following the trends of the marketplace over the past twenty years it is the closet you can get to a guaranteed investment.

The next logical question is when the best time to sell the stocks is. Following the Dogs of the Dow strategy at the end of every year you should look at the stocks that you have to see if they are still ranked as the highest yield stocks on the Dow index. Take a moment to also look and see what the top ten highest yield stocks are in general so that you have some direction. If you already hold some of them, keep them, otherwise, sell the ones that are performing again and buy into the bottom ten stocks that do not own. Wait another year and then repeat the process.

The obvious perk of the Dogs of the Dow investment strategy is that it is simple and only requires research of the Dow yield index. However, the even better perk is that it does work and can be implemented at any time with you as the official timekeeper of your stock performance and exchange.

The Dogs of Dow strategy is only one of the many ways that novice investors and those who lack the time to research the stock market thoroughly can get ahead in the shares sector of finance. For more helpful strategies and tips head over to Technical-Stock-Screener.com.