On unique advantage to Durig’s Dogs of the Dow is our quarterly rebalance, but even more important is the Dow Jones Industrial Average is going to remove both Exxon Mobil and Pfizer from the Dow. We also have already removed those two companies from our Dogs portfolio. Even though we are still down year-to-date, our three year and lifetime numbers are pretty good at 6.83 for 3 years and lifetime of 7.03. These numbers, even though in a little disappointing, still greatly outperform the static Elements Dogs of the Dow.
For us the combination of reballancing and adding and removing two investments has been a significant change. Will this help? We sure hope so. Also, we are seeing the economy change and the companies that did not see a slowdown such as tech have seen the bulk of the positive returns.
We believe that our approach significantly increases the probability of high returns. The Durig Dogs are also more focused, and even though they performed very well during the 2020 pandemic (causing selloffs compared to their peers), this higher level of concentration could possibly increase principle risk.
Overall, the Dow’s current performance is based on a select few technology companies (paying a very small dividend or none at all). These companies have greatly enhanced the Dow’s returns. Based on income investment, we believe Durig Dogs of the Dow has been performing very well compared to its income peers.
Measured against the current high yield (junk bond index yielding 5.33%), last quarters Durig Dogs of the Dow yielded 5.15% (it will be lower with the rebalancing). What we are trying to demonstrate is that high quality dow stocks are giving a dividend yield comparable to the junk bond index. Not only is that very rare, but dividend income has a superior tax advantage over income investments. In other words you take far less default risk to get very close to the same income.
For those seeking a Dogs of the Dow portfolio, we believe we have demonstrated (with significantly higher returns over time) that we have a superior program for Dogs of the Dow investors. Investing with Durig means you could possibly make much more over time, while doing less work. We want to help you enjoy the fruits of your well-earned leisure time while your money works harder for you.
With Dogs of the Dow, much like the Durig Dogs of the S&P, you receive a much larger dividend income for taking Dow-level company stock risk and possible rewards; for an investment in a portfolio that has historically done very well, you receive currently more income than from the 10-year treasury. All of this effort is designed to provide a superior fiduciary resource for our value income clients. So if you want (or need) to generate more income, simply give us a call or email.