The Dow Dogs' Contrarian Bite

If everyone else jumped off a bridge, would you?

When it comes to investing, the answer is probably yes. But there's a perfectly good antidote to buying high and selling low, and it's most likely something your mother never told you: contrarian investing.

Contrarian investing is a simple way to benefit from investors' tendency to be most optimistic when the market is peaking and most pessimistic when the market is bottoming. In his seminal Stocks for the Long Run, Jeremy Siegel lists contrarian investing first in his section on "return-enhancing strategies," citing evidence that "contrarian strategies of increasing stock exposure when most investors are bearish and decreasing exposure when they are bullish can improve long-term returns." ...