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analystslie

10/23/06 12:11 AM

#137002 RE: mick #137000

2006 Dogs of the Dow** The Theory on the Dow Dogs Theory is generally based on the list being made up on Dec. 31 prior to the new year. The original dogs of the dow theory is appealing for various reasons:

Simplicity. The Dogs of the Dow theory is very simple to follow as you buy the 10 highest dividend yielding stocks from the Dow Jones Industrial Average [DJIA] and hold them for a year.
The built-in tax advantage. Since you hold these stocks for a year, it translates into lower capital gains tax (currently no more than 15%).
High dividend yields. By the very definition of the theory you are picking stocks that pay nice dividends and hence continue to reward you through the year even if the price of the stock does not appreciate much.


12/30/05 10/20/06
Dog Symbol Price Price

General Motors GM $19.42 $33.34
AT&T T $24.49 $34.44
Verizon VZ $30.12 $37.80
Merck MRK $31.81 $45.70
Altria MO $74.72 $79.67
Pfizer PFE $23.32 $27.52
Citigroup C $48.53 $49.91
DuPont DD $42.50 $44.97
JP Morgan Chase JPM $39.69 $47.12
General Electric GE $35.05 $35.42

For some reason on my prices above didn't align with my columns. First price is 12/30/05 price and second price is as of Friday 10/20/06