Dogs of the Dow Strategie – Trading strategies

A known and at the same time successful strategy for trade with shares is the Dogs-of-the-Dow-Strategie. On this occasion, it concerns a strategy which deals with the dividends. Every beginner who would like to begin with share trade should decide on a successful strategy. This should be checked extensively to make sure that will not count blind on a course. With the Dogs-of-the-Dow-Strategie the bases should be examined first, before one deals with the new values of the enterprises. At least, an investment draught is necessary to be able to recognise, when the suitable entrance is to receive no losses.

What is the Dogs-of-the-Dow-Strategie and where from it comes?

With the Dogs-of-the-Dow-Strategie it concerns a dividend strategy which is very interesting. An investment draught which concentrates upon the payment can bring to great success with itself. In 1991 Michael B. O'Higgins has discovered this possibility to receive profits. In the aforesaid year he has explained to the public the possibility to use the dividend yield as profits. Besides, he has selected by the yield ten values, so that he could profit from the increase of the shares. The name of the word "Dog" stands in the American colloquial language for a thing which does not have a lot of value. Therefore the investment is meant with the name in a share which is undervalued. The investor had published the special results with the help of his Dogs-of-the-Dow-Strategie and also had underlined in the book "Beating the Dow". He could absolutely prove that the draught supported in the years from 1973 to 1999 Dow Jones.

The real thought of the strategy is to find the undervalued shares and to register profits from the new chase. It would like to be profited from the climbing up shares so much as it is only possible. O'Higgins could find out that dividends develop more consistently and yield more profits than first was accepted. The profit and turnover of an enterprise strengthen itself with the time and can show clear improvements in her course. This would mean that a favorable course can pull itself together to register direct success.

The choice of the Dogs of the Dow

So that a suitable choice can be carried out, it is important for the beginning of the year to carry out a ranking. This choice should clear, how high the dividend yields of the different enterprises are which is offered. The special figures can arise from the last last year and point to the closing prices in the new year. The decisive identification number can be received on account of the calculation which has an important meaning for the continuation of the profits. Then the real investment sum is distributed to the same parts to ten shares which seem interesting. All ten shares should be held during the year and are not sold with the Buy-and-Hold-Strategie. The selection procedure of the shares recurs next year once more and should lead to the fact that the end of the year courses are used for an other analysis.

The risks

There are at the same time, nevertheless, also special risks which are to be followed and cannot be simply received for a good profit. Who would like to follow the Dogs-of-the-Dow-Strategie, can guarantee that own money is always invested. This entails that a profit is to be received in most cases. Indeed, the heights and depths of the share prices which are not to be avoided must be also taken part. In the meantime the considerable losses which show a clear defeat can be received. Indeed, should be worked with positive mood further on looking positively in the future.

It is to be protected that one makes friends with the different courses and also can put away losses., Among the rest, the Dogs-of-the-Dow-Strategie can lead to a big branch risk. Thus has to do to themselves in 2008 many institutes with the Dogs-of-the-Dow-Strategie a pivot leg tries. These were influenced by the financial crisis very strongly and, unfortunately, could not receive a lot of profit. On the contrary losses had to be accepted. Moreover, it is criticised in the strategy that blind pursuing of the shares can yield no good profit with itself. A whole year to receive falling courses had to be found out at General Motors, to insolvency in 2009 had to be announced by the enterprise.

Summary

The Dogs-of-the-Dow-Strategie can absolutely yield profits with itself as O'Higgins could make in the years from 1973 to 1999 clear. His performance had brought good profits to him. It is put topically, nevertheless, on this trend, can become for the period from 1995 to 2014, unfortunately, not on the same wave of success climbed up. The draught of the Dogs-of-the-Dow-Strategie was not simply sufficient to be able to go back to the same success of the investor. The continuously stable yields are a stable factor on which can be built up. Nevertheless, the rising yields can be only one snapshot and these cannot show whether the enterprise could lead in the long term a successful share. An enterprise can raise the profit sharing what points to a steadfast and respectable company. However, on the other side is also to be mentioned that some shares show a very good yield which has not changed particularly for 100 years. The combination of the Dogs-of-the-Dow-Strategie with the basic analysis could bring clear better results with itself and make clear which is to be selected enterprise to invest money.

Most enterprises can promise in the topical time on account of the high competition no stable profit payment. Too many companies have gone simply bankrupt and, unfortunately, lead to the fact that own investments brook fall down. The investors who would rather like to play it safe use the small Dogs-of-the-Dow-Strategie. With the Small Strategy it concerns the choice from not to 10, but 5 courses which are equipped with the best figures. The strategy is no sure guarantee that profits can be received. Also at Internet enterprise no clear profits can be received with the help of the dividend strategy. That's why many enterprises will not be possible to carry out the Dogs-of-the-Dow-Strategie with them. With big European shares the strategy can be still put through. Share enterprises can be examined with the help of DAX to select the suitable companies for a good yield.

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