Definition of "Dogs of the Dow, The"

An investment timing strategy where an investment is made at the start of the year in the 10 Dow Jones Industrial stocks with the highest dividend yield. Each of the 10 stocks are purchased in equal dollar amounts at the beginning of the year and held until the next year end. At that time the portfolio is re-balanced with equal dollar amounts of the 10 highest dividend yielding stocks at that time. (There are unit trusts can be purchased to accomplish this strategy.) Note: Generally the yield is higher on these stocks as the result of a low price resulting from the stock being out of favor with investors.