Dogs 2007: Attractive Armchair Investing!

Dogs of the Dow has been attractive to me for quite a while, because it is a strategy that values beaten down but still mainstream large cap U.S. companies. Right now, there are companies in there that represent sectors for the U.S. economy, e.g. for many years Philip Morris (a.k.a. Altria) was down beaten and undervalued. But it achieved a great turn around, had 5%-6% dividends for years, and finally cleared itself of its legal troubles. Result: this year achieved new highs, and made those patient investors a tidy sum in the meantime. Perhaps even a double of the stock price, plus years of dividends.

Right now, the Telecoms sector has been hugely undervalued. In the Small Dogs, I believe that they may represent good opportunities for the careful investor.

2006 Results

Not including dividends. Approx 16% Not a bad year, if you had bought all 10!

2006 Dogs of the Dow 13.74%
Dow Jones Industrial Average 3.35%
S&P 500 1.41%
Nasdaq -6.58%
Russell 2000 1.15%

So, this might be a very good strategy for those who aren’t into active trading.