- Nearly 4% in Dividend Income Alone
- Outperforming Over Time
- Annualized Lifetime Return of 14.03%
This review explores the performance of the Dogs of the Dow Portfolio, with nearly 4% in dividend income alone, and considers the many merits of blue chip dividend stocks such as those held in the portfolio.
- Year-to-Date Return of 13.03%
- Trailing 1 Year Return of 10.31%
- Annualized Return Since Inception of 14.03%
- Average Dividend Yield of 3.98%
- Alpha of 4.47 (vs. Benchmark*)
- Beta of 0.75 (vs. Benchmark*)
A Long Term Strategy
Durig’s Dogs of the Dow Portfolio is designed to produce high levels of dividend income over time with less volatility than the stock market. Over the last year, the portfolio has generated nearly 4% in dividend income alone, and has an annualized lifetime return of over 14%. In fact, Durig’s Portfolio has outpaced its closest benchmark* in annualized lifetime return by nearly 2%.
The holdings in Durig’s Dogs of the Dow Portfolio may change from year to year, but the underlying filters used to select portfolio holdings remain unchanged.
At year-end, Durig targets a grouping of of the very highest yielding dividend stocks that have fallen out of favor or “dogs” listed on the Dow Jones Industrial Average (DJIA) and holds them for the duration of the year. Over time, these “dogs” tend to have “more room to run” with regard to their share price.
Time in market nearly always beats timing the market.
In this manner, Durig has designed a portfolio that is simple, yet effective in accomplishing what it was designed to do: capture higher dividends of some of the highest yielding (with respect to dividend paid) blue chip stocks listed on the Dow Jones.
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The long term is where Durig’s Dogs of the Dow Portfolio continues to excel, outperforming its peers in lifetime return with an annualized return since inception of over 14%, and nearly 4% in dividend income alone.
Blue Chip Merits
Historically, blue chip dividend stocks have shown themselves to be resilient under pressure, offering relative stability in tough markets. Blue chips are typically able to resist or rebound from downward market pressure much better than non-dividend paying equities due to stronger fundamentals, and tends to equate to more consistent (and resilient) portfolio performance in periods of market turmoil.
Fundamentally Strong Companies
This stability is seen not only in the stock price and /or dividend, but often times is evidenced in the company’s earnings, financials, growth, and management. A fundamentally strong company usually performs much better over time, equating to stronger returns for investors and helping to put more cash in their pockets, maybe even retire early.
Aside from stability, blue chip dividends also help to diversify existing income streams and tend to outpace the rate of inflation, as dividends (and earnings) typically grow over time, preserving purchasing power of capital within the portfolio and maintaining the value of your hard earned dollars.
Participating in Durig’s Dogs of the Dow Portfolio is even more beneficial in a tax advantaged account (like a retirement account). Neither capital gains nor dividend income are taxed so the portfolio grows in a tax-free environment , allowing investors to keep more of their hard earned money.
Less Historical Volatility
Dividend payments help to reduce loss due to change in stock price, and help to diversify and supplement income streams. A recent article provides an example:
“During the overall market downturn in 2002, when non dividend-paying stocks fell by an average of 30%, while dividend-paying stocks only declined on average by 10%. Even during the severe 2008 financial crisis that precipitated a sharp fall in stock prices, dividend stocks held up noticeably better than non dividend stocks.”
Less historical volatility has provided a smoother and more enjoyable ride for investors that would rather not take part in the extreme highs and lows that the stock market is subject to.
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Why Low Cost Individual Accounts?
Many investors of blue chip equity find themselves in a pooled / mutual fund structure. It sounds nice to share in the gains and losses, but the reality is that pooled investments tend be be far messier, and often more expensive due to high administrative costs, hidden or confusing fees, not to mention an abundance of tax inefficiencies.
Pooled investing is often compared to a public swimming pool with lots of children; everyone knows there will be pee in the pool. Individual investing on the other hand is like swimming in your own private pool (it tends to be much cleaner, and if there’s pee, at least it’s yours).
Wouldn’t you rather swim in your own pool?
Avoid a pooled structure and opt instead for an individually managed account such as Durig’s Dogs of the Dow Portfolio, which features a much more accurate investment environment, with the tax implications of the investor matching that of the account.
Durig’s Dogs of the Dow Portfolio has continued to outperform its peers over time, and with less volatility. The portfolio continues to perform as designed, producing nearly 4% in dividend income, allowing you to sleep easier at night.
For investors that seek increased income stability in a portfolio designed to produce high levels of dividend income with less volatility than the stock market and more peace of mind, Durig’s Dogs of the Dow Portfolio is an outstanding choice, with professional management all at a very low cost.
For More Information
Durig Capital has several high yield portfolio strategies available, click below to learn more.
TD Ameritrade Advisors
Durig is now offering its highly successful Fixed Income 2 (FX2) Portfolio, the Dividend Aristocrats 40 Portfolio, and the Income Aristocrats Portfolio to clients of other Registered Investment Advisors through segregated accounts at TD Ameritrade Institutional. Please ask us to learn how this might work for you and your current advisor.
Disclaimer: Past performance is no indication of future success. Any performance shown is this publication is as of 11-25-19. * The Primary Benchmark used is SPDR Dow Jones Industrial Average ETF. 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.