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 As we've done for the past several years, it's time once again to announce the Dogs of the Dow for the year 2009. After experiencing a double-digit gain in 2006, and a losing year in 2007, the Dogs took another pounding in 2008 with a loss of nearly 42%. If you were following the credit crisis of 2008, then it's no surprise the Dogs performed poorly last year.
Dogs of the Dow Performance
The Dogs of the Dow ended 2008 with a double-digit loss for the year. That's the worst single-year performance in over ten years. More importantly, the "Dogs" once again under-performed the stock market when compared to broader measures such as the S&P 500 and the Dow Jones Industrial Average.
In 2008, the S&P 500 finished the year with a 38.5% loss, while the DJIA closed out the year with a loss of 33.5%. That means the Dogs of the Dow Theory did not meet its objective again last year since it failed to beat these two performance measures. Overall, the Dogs of the Dow Theory has only proved itself a winning investment strategy once in the last five years - a very disappointing outcome for this investing theory.
Some of the bigger Dogs in 2008 included General Motors, Citigroup, and General Electric - three companies that were frequently in the news in the fourth quarter of 2008. The credit crunch of 2008, along with the subsequent Market Crash of 2008, left these three giants, along with many companies, reporting lower than expected earnings per share or with significant write-offs due to their exposure to consumer credit.
2009 Dogs of the Dow
It's only possible to announce the 2009 Dogs of the Dow after the last trading day of any given year. Fortunately, the criteria for choosing these new Dogs are simple:
The 2009 Dogs can be found in the following table:
Dogs of the Dow List - 2009
| Stock Symbol |
Company Name |
2008 Close |
Dividend Yield |
| C |
Citigroup Inc. |
6.71 |
9.54% |
| BAC |
Bank of America Corp. |
14.08 |
9.09% |
| GE |
General Electric Co. |
16.20 |
7.65% |
| PFE |
Pfizer Inc. |
17.71 |
7.23% |
| DD |
Du Pont de Nemours |
25.30 |
6.48% |
| AA |
Alcoa Inc. |
11.26 |
6.04% |
| T |
AT&T Inc. |
28.50 |
5.75% |
| VZ |
Verizon Communications Inc. |
33.90 |
5.43% |
| MRK |
Merck & Co. |
30.40 |
5.00% |
| JPM |
JPMorgan Chase & Co. |
31.53 |
4.82% |
If you look back at the 2008 Dogs of the Dow, then you'll notice there was not a lot of change to the list this year. General Motors, Home Depot, and Altria Group were replaced by Bank of America, Alcoa Inc., and Merck & Co. in 2009.
Dow Theories
This particular Dow Theory was first popularized by Michael O'Higgins in his book Beating the Dow, back in 1992. If you're interested in learning more about the assumptions behind this investing strategy, then you might want to read our complete article on Dogs of the Dow. That article explains all of the history behind this approach, including how you are supposed to invest in each of these stocks. It also contains the list of Dogs of the Dow for prior years, as well as the annual performance of the Dogs over the last several years.
About the Author - Dogs of the Dow 2009
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