Dogs of the S&P 500: Income Diversification, Blue Chip Dividends, Less Historical Volatility Than the S&P 500

  • Return Since Inception (Annualized) of 9.77%
  • Trailing 1 Yr Return of 11.84%
  • YTD Return of 16.05%
  • Alpha of 0.80 (vs. Benchmark*)
  • Beta of 0.68 (vs. Benchmark*)
  • Portfolio of 100% Blue Chip Equity with Dividends

The New Dogs on the Block

Last week, Durig Capital reviewed it’s own unique version of the Dogs of the Dow Strategy. Over the years, the Dogs of the Dow Strategy has been adopted by many investors looking to beat the Dow Jones Industrial Average (DJI).

Historically, our Dogs of the S&P 500 has produced more Growth and Income than Bonds, and contained less Volatility than even the S&P 500.

Now, Durig Capital has created its own version of the well known and established Dogs of the Dow Investment Strategy but has taken a specialized approach entirely built around the S&P 500 containing only Blue Chip Equity.

Durig’s Dogs of the Dow Portfolio

Historically, this unique strategy  has outperformed most income producing investments with less historical volatility than even the S&P 500 while still providing a handsome level of dividend income, allowing for increased income diversification.  We also strive to achieve increased tax-efficiency in the portfolio.

Historically, our Dogs of the S&P 500 has produced more Growth and Income than Bonds, and contained less Volatility than even the S&P 500.

The very low management cost and high level of professional service combined with a strong track record of performance that contains less historical volatility than the S&P 500 have allowed us to provide higher net returns to our clients over time. Historically, our Dogs of the S&P 500 has produced more Growth and Income than Bonds, and contained less Volatility than even the S & P 500.

 

Blue Chip Performance with Less Historical Volatility

Dow Jones Volatility, Q4 2018

The historical returns of Durig’s Dogs of the S&P Portfolio contain far less historical volatility than the S&P 500, or even the Dow Jones Industrial Average (DJI), due to the portfolio having only a weak positive correlation to market indices like the S&P 500 or the Dow Jones.

For example, in the market downturn of Q4 2018 (Right), Durig’s Dogs of the S&P’s performance (Below) fell far less than both the S&P and Dow over the same period.

Historically, the inverse is also generally true; in up markets Durig’s performance rose somewhat slower than stock market indices.

Income Diversification

A wide variety of income producing investments help to maintain consistent and/or growing incomes over time.  Fixed Income / Bonds / Notes are very commonly used to producing income, but many others are overlooked. Adding high levels of dividend income to the mix not only reduces inconsistencies in income levels, but also helps to minimize the risk of loss as investments do not always perform as expected.  Additionally, Durig’s Dogs of the S&P 500 contain blue chip stocks that span many different industries, so both income diversification and portfolio diversification may be improved by adding a Dogs of the S&P Portfolio to an existing investment portfolio.

Correlation to Stock Market Indices

Durig’s Dogs of the S&P Portfolio’s weak correlation to stock market indices act as a form of insulation from market volatility. Beta is an asset’s correlation to the overall market and is a measure of asset volatility relative to the market.  A beta above 1.0 means that an asset or a portfolio’s price is hypothetically more volatile than the market. For example, a portfolio with a beta is 1.5 is expected to have 50% more volatility than the market, which has a beta of 1.0 when taken as a whole.

A low positive beta or weak positive correlation to the overall market, such as the beta of Durig’s Dogs of the S&P 500 can almost be thought of as smoothing out the ups and downs for a less bumpy and more enjoyable ride over time.

 

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Portfolio Structure

  • Low average cost + Higher Returns = Higher Net Returns to Clients
  • Discretion allows for active management of investments and enables proactive management
  • Segregated accounts; no pooled funding, so tax implications of the account match that of the investor
  • Investors may access their account online, allowing for 3rd party validation (TD Ameritrade offers comprehensive, 24/7 account access online to their custodial clients)
  • We leverage over 50 years of professional investment experience with an emphasis on  personalized service

Getting Started with Durig’s Dogs of the S&P Portfolio

  • Minimum Investment of 25k
  • Discretionary Management only
  • Low Annual fee of 0.50%
  • No minimum investment period
  • Custodied at TD Ameritrade Institutional
  • Begin with an Introductory Conversation
  • Review/return a signed Discretionary Management Agreement
  • We send you the appropriate forms with instructions for completion , return the forms to us and let us take care of the rest of the set-up
  • We are just a call or email away should you need assistance

If you have any questions or would like further information Durig’s Dogs of the Dow Portfolio Strategy, please call Durig Capital at (971) 327-8847, or email us at info@durig.com.

Disclosure: Durig Capital and certain clients may hold positions in Denbury Resources’s August 2021 bonds.

Disclaimer: Please note that all yield and price indications are shown from the time of our research.  Our reports are never an offer to buy or sell any security. We are not a broker/dealer, and reports are intended for distribution to our clients. The high yield strategies presented in this review by Durig Capital may not be suitable for all investors.  This is not investment advice from Durig Capital, nor a specific recommendation to buy or sell securities. If you have any questions or concerns about its suitability for your personal investment, you should seek specific investment advice from a registered professional before making an investment decision.

Disclaimer: Past performance is no indication of future success.*S&P 500 Idx TR USD is the primary benchmark used.

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