By: Michael E. Martinez

Dogs of the Dow is probably one of the most famous investment strategies of all time. However, it doesn't always create the best returns. It is a strategy in which taking the ten most out of favor stocks in the Dow, or take the lowest preforming. You then hold those ten stocks until the following year and starting the whole process over again year after year.

The Dogs of the Dow strategy was created in 1972 and has proved to be successful in the past. This strategy has outperformed the Dow Jones Industrial Average (DJIA) in three of the past five years. This strategy isn't for everyone as it is a dull way of investing as well as systematic. Do not expect to make major gains in any given year using this strategy.

December 31st is an ideal place to rebalance your Dogs of the Dow strategy. However, using any other date might significantly change your gains or losses. As with any investing strategy, please check with your financial adviser or broker to see if this strategy is appropriate for you.

Part of this strategy are using the gains from the yields to accelerates your performance for the portfolio. When using this strategy, try to maximize the gains by using high-yielding stocks with in the Dow.