Dogs of the Dow - FAQ - Frequently Asked Questions

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FAQ - Frequently Asked Questions

If you have further questions, be sure to check our FAQ 2.

Here you will find a few of the more common questions asked by fellow Dogs of the Dow investors.

Must I use December 31^st as the anniversary date? Though using December 31st as the anniversary date is the most common way to go, feel free to use any day of the year as your anniversary date. The point is to remain disciplined and consistent.

If I use a day other than December 31st as the anniversary date and hold for one year will I get exactly the same results as those that use December 31st as the anniversary date? Your results will not be exactly the same due to the simple fact that you will not be holding the exact same stocks during the exact same periods. What we can say though is that your performance will be similar. So feel free to set your own anniversary date. But once again, and we can't emphasize this enough, the key is to remain disciplined and consistent.

On Dogs of the Dow anniversary date, should I liquidate my entire Dogs of the Dow portfolio and then simply purchase the following year's Dogs of the Dow with the proceeds? You may but when brokers fees and taxes are taken into account you will find that liquidating your entire Dogs of the Dow portfolio is not the most cost effective way to rebalance your portfolio. For details on how to rebalance your portfolio we suggest you take a look at the following frequently asked question.

On Dogs of the Dow anniversary date, how exactly should I rebalance my Dogs of the Dow portfolio? When your Dogs of the Dow anniversary date arrives, add up the value of all the stocks that make up your portfolio plus any new money that you may want to add to your portfolio. This is the total amount that you want to invest in the Dogs of the Dow for the following year. (For example: $20,000) Divide this number by 10. The result is the amount you will invest in each of the ten Dogs of the Dow. (Per our example: $2,000) Simply sell the stocks which are no longer to be "Dogs". (Typically two to three stocks) Now your goal is to end up with $2,000 of each of the 10 Dogs of the Dow. Of the Dogs that carry over into the new year, buy or sell a few shares until each of the stocks has a value of $2,000. Then buy $2,000 of each the "new" Dogs of the Dow. That's it.

Can I buy partial shares of a stock so I can allocate exactly 10.00000% to each of the Dogs of the Dow stocks? You can only buy whole shares of a stock, therefore you will not typically get an exact 10.00000% allocation for each of your ten Dogs of the Dow stocks. This slight variation in allocation should not be a cause of concern. Your investment performance will still be very close to that presented in our performance tables.

What is the benefit of rebalancing every year? Rebalancing your Dogs of the Dow portfolio back to its 10% per stock allocation will result in more shares going to the stocks that have under performed on a relative basis. This is a dollar cost averaging type of effect. Also, rebalancing prevents your portfolio from becoming overly weighted in one or two stocks after years of investment thereby reducing the volatility of your portfolio.

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