Imperfect Markets Theory

Imperfect Markets Theory

Imperfect Markets Theory

Investors looking for above average return with lower risk may consider buying stocks of large companies paying higher dividends. The strategy that is nicknamed the Dogs of the Dow is an attempt to take advantage of this tactic.

Definition of the Dogs of the Dow Jones Industrials

The strategy entails buying equal amounts of the 10 highest yielding stocks in the Dow Jones 30, a collection of large cap stocks, which means companies with a high market valuation. This is computed by multiplying the share price by the number of shares outstanding.