In the prior article, we discussed the “Dogs of the Dow (and S&P 500)” investment strategies, in which investors rank the stocks in the respective indices by their dividend yield at the end of each year and rebalance into those with the highest yields. Because this strategy involves selecting the highest dividend-yielding stocks from the S&P 500, it is potentially attractive for income-focused investors. Dividend yield, representing the annual dividend payout as a stock price percentage, is a key metric in this strategy. While high-yielding stocks can be risky, thorough research into a company's financial health can help mitigate these risks.
