In Tough Times, 'Dogs' Are Bulls

The bull market lasted so long that a lot of folks forgot about this classic strategy... After all, stocks have trudged higher since the housing bust in 2009. [Chaikin PowerFeed]( In Tough Times, 'Dogs' Are Bulls By Pete Carmasino, chief market strategist, Chaikin Analytics [The bull market lasted so long]( that a lot of folks forgot about this classic strategy... After all, stocks have trudged higher since the housing bust in 2009. And they've done so with incredible consistency. The S&P 500 Index has only seen a small number of corrections since 2010. Still, if you've been an investor since before the last bust, I bet this strategy will sound familiar... I'm talking about the "Dogs of the Dow." Michael B. O'Higgins popularized the stock-picking strategy in the 1990s. And when times start getting tough, it pops back into the limelight. You see, the Dogs of the Dow strategy is a contrarian model. It's specifically designed to outperform in rough markets. So with the S&P 500 down about 6% this year, it's a great time to revisit this strategy. In today's essay, I'll go over the details of the Dogs of the Dow strategy, talk about an easy way to play it in your brokerage account, and share how it's performing right now... Recommended Links: [Until Midnight TONIGHT, Claim a Free Year of the Industry Monitor Portfolio]( Until tonight at midnight, you can claim a FREE year to what might be the only investment blueprint in the world that can help you protect your money as some industries crash... while also giving you the opportunity to see extraordinary 300 to 500% potential gains in the months to come. And it's all backed by a built-in exit strategy with daily e-mail alerts that can help you stay the course... and know the perfect time to lock in any profits. [Click here for all the details](. ['A Gold Storm Is Coming']( The uptrend in gold is now here, says one top metals expert. But if you're not taking advantage of this way to invest for less than $10, you're missing out. It's not a mining stock, ETF, or even bullion... but this virtually unknown stock could hand you a small fortune as gold rips higher. [Click here for details](. In short, the Dogs of the Dow is an annual system. Each year, investors are supposed to pick the 10 stocks from the Dow Jones Industrial Average with the highest dividend yields. Now, that can get a little confusing. But the basic idea is that the stocks with the highest dividend yields are also the stocks with the most unfavorable price action at the time. In other words... when the price of a dividend-paying stock falls, the percentage of its dividend (compared to its price) goes up. So in practical terms, that means you end up buying the Dow stocks that have struggled the most over the past year – the Dogs. As far as upside, the idea is that those stocks must be "oversold." After all, we're not talking about small-cap companies here... We're talking about the 30 large-cap stocks in the Dow. Better still, in bear markets, the big dividend payouts can help cushion any downside. We could make our own Dogs of the Dow portfolio. But let's keep things simple today. Instead, let's use an exchange-traded fund ("ETF") that gets us close enough to our goal... The Invesco Dow Jones Industrial Average Dividend Fund (DJD) weighs its holdings based on their dividend payments. In the end, it's very close to the Dogs of the Dow strategy. Here's the breakdown of its top 10 holdings today... [Chaikin PowerFeed] These top 10 holdings make up roughly 56% of the ETF. And more importantly, the ETF is helping investors weather today's economic storm. Take a look... [Chaikin PowerFeed] The S&P 500 is down roughly 6% this year. But if you would've focused on the highest dividend-paying stocks by owning DJD shares, you would be up around 2%. And that's before you factor in the ETF's 2.8% dividend yield. Of course, these returns obviously aren't mind-blowing numbers. But the broad market is down about 6%. DJD's outperformance shows it isn't a bad way to weather the storm. And if nothing else, you've gotten a refresher on the Dogs of the Dow strategy. Now that it's outperforming the market, I'm sure you'll soon hear it come up in the mainstream media. Good investing, Pete Carmasino Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.43% 9 18 3 S&P 500 -0.22% 133 296 67 Nasdaq -1.40% 12 73 14 Small Caps -0.73% 254 1115 504 Bonds -1.08% Energy +2.78% 19 0 0 — According to the Chaikin Power Bar, Small Cap stocks have become significantly more Bearish than Large Cap stocks. Major indexes are mixed. * * * * Top Movers Gainers [rating] EPAM +10.13% [rating] CTRA +7.35% [rating] OXY +7.14% [rating] DISH +6.42% [rating] DISCA +5.90% Losers [rating] ENPH -5.71% [rating] MPWR -5.67% [rating] NVDA -4.50% [rating] SEDG -4.24% [rating] TWTR -3.75% * * * * Earnings Report Reporting Today Rating Before Open After Close No earnings reporting today. Earnings Surprises No significant Earnings Surprises in the Russell 3000. * * * * Sector Tracker Sector movement over the last 5 days Health Care +3.42% Energy +3.23% Staples +2.69% Utilities +1.93% Real Estate +0.79% Materials -0.66% Financial -0.86% Communication -1.75% Industrials -2.52% Discretionary -3.10% Information Technology -3.78% * * * * Industry Focus Retail Services 19 53 33 Over the past 6 months, the Retail subsector (XRT) has underperformed the S&P 500 by -18.69%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #10 of 21 subsectors and has moved up 6 slots over the past week. Indicative Stocks [rating] CVNA Carvana Co. [rating] CHWY Chewy, Inc. [rating] MNRO Monro, Inc. * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2022 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. 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