At the end of last year, we highlighted the performance of the “Dogs of the Dow” in 2021. The Dogs of the Dow is a simple strategy that says to buy the ten highest yielding stocks in the Dow at the end of each year. In 2021, the Dogs underperformed, but so far in the new year, the complete opposite is true. As shown below, a little more than half of the Dogs are in the black year to date compared to only three (of twenty) non-dogs that are positive.

Taking a look at an index of the Dogs of the Dow going back to 2001, this year has marked the widest gap in returns between the Dogs and the broad Dow 30 through the first 18 trading days of the year. The only year that comes anywhere close to the gap in performance was 2008, and unlike this year, back then the Dogs were in the red at this point of the year.