With the simplicity, success and effectiveness behind the Dogs of the Dow, we also started Dogs of the S&P 500 at the same time. Everyone wants to ask about performance and “which portfolio is better, Dogs of the Dow or Dogs of the S&P 500?” We have put in several charts of performance in both programs since inception.
So the performance over time has been very good considering how tough the market has been. It has been two good years and one very challenging year, knowing the Dogs of the S&P 500 just completed its third year this month with a 7.26% return. With the very high dividend of over 5% and a more stable market, we believe the Dogs of the S&P 500 will do well. Historically (for the last year two years up to about December 2019), the Dogs of the S&P outperformed the Dogs of the Dow, but the lead has changed back during the 2020 COVID-19 crash and now the Dogs of the Dow is outperforming. The Dogs of the S&P 500 does have a higher dividend.
The Dogs of the S&P 500 has done very well in performance, especially if you benchmarked it to other programs yielding in the 5% income range. It has also significantly outperformed many fixed income funds with similar levels of income.
With Dogs of the S&P 500 selecting a concentrated portfolio of S&P 500 company stock, these are some of the biggest companies in America. Possibly the single biggest risk is that the portfolio only holds 10 companies. The Dividend Aristocrats portfolio has a more diversified risk but the income is less. Averaging 7.26% per year over the last three years, is pretty solid.
Dogs of the S&P 500 Lifetime Performance 6-24-2020
Dogs of the S&P 500:
Annual Cost: 0.50% or 1/8 of a percent per quarter.
Average Dividend Yield of About: 5.08%
Minimum Investment: $15,000
Minimum Holding Period: None
To us the market is basically trying to find a path out of this rough market; one of the best options for those needing and wanting more income is the very high income S&P companies provide.
This is not a home run portfolio, but so far it is solid in a good performer in good markets and bad, with a constant high dividend. Over time it should outperform most fixed income bonds funds as Aristocratic companies having outperformed the general market over time, and with the high 5% and tax preferred dividend, this portfolio probably is giving off more current income than many fixed income bond funds.
The Dogs of the S&P 500 are investing in US companies that raise their dividend each and every year. This alone should increase the dividend, but Durig re balances the portfolios quarterly plus provides dynamic weighting so the accounts should provide higher income in future years. Also with Durig Dogs, all trades are completed transaction free. All of this provides a strong likelihood that the divided income will go up every year.
With the Federal Reserve 10-year treasury yielding only .66, this rate is so low that any treasuries or corresponding investment often does not pay enough income to achieve a comfortable retirement for many.
Income of $1 million at:
- 10-year treasury at 0.66 = $6,600
- The Dogs of the S&P at 5.08 = $50,800
Being a millionaire and not being able to live off it is a new phenomenon. That is why people come back to stocks. With a million dollars in the Dogs of the S&P 500 you could have around $50,000 a year in the more highly desired dividend income (which is often taxed lower).
Very low interest rates make it hard for people to find a livable income stream in America. With many Europe and Japan having negative interest rates, this greatly increases the problems, making it even harder for those income investors looking for a strong total return.
For those looking to step into the market now, the Dogs of the S&P deserves a real review. This could be a welcome alternative for income investors willing to take some market risk for future growth.
We offer our successful Durig’s Dog of the S&P 500 investment strategy to other Charles Schwab Registered Investment Advisors through segregated accounts. Our price is the very low cost of only 50 basis points and the RIA can apply an additional fee that they believe is best situated for your clients and or your firm.
For clients of Charles Schwab advisors, please ask us how this might work for you and your current Financial Advisor.
Please review the right hand column for advisor programs available.
Disclaimer: Past performance is no indication of future success. The high yield strategies presented in this review by Durig may not be suitable for all investors. This is not investment advice from Durig, 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. Information on this website is provided for informational purposes only and is not offered as advice with respect to any particular security or related financial instrument. This information should not be used as a basis for making an investment decision and must not be treated as a substitute for seeking advice from a licensed professional. The suitability of a given investment for a particular investor depends on a number of factors, each of which should be considered carefully. Such factors include, but are not limited to, the risk associated with the investment, the nature of current market conditions, and the investor’s objectives, personal needs, and specific circumstances.