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Dogs of the Dow

Definition of 'Dogs of the Dow'

Also known as the Dow Dividend theory. An investing strategy that entails rating Dow stocks by dividend yield from highest to lowest at the beginning of each year and then buying equal dollar amounts of the top 10.

Each year, dividend yields are recalculated, new stocks in the top 10 are added and ones that don't make the cut anymore are sold. Kinda kooky, but since it was first formulated in the book Beating the Dow back in 1972, its made investors enough money that the "dogs of the Dow" theory puts buying and selling pressure on stocks at the beginning of each year.

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