Dogs of the Dow, Investing Strategy Explained

Investors are often involved in a quest to beat the market. That is, they want to make investing decisions that deliver performance results better than a passive investing strategy, such as one involving the purchase of market-index funds.

The Dogs of the Dow represents an investing strategy developed with the goal of outperforming the Dow, a market index. It involves using a simple formula to identify the top 10 undervalued stocks among the Dow holdings, which consist of 30 blue-chip stocks. There are derivatives of this strategy, also designed in hopes of outperforming the market.

How Should I Invest My 401k? 7 Steps to Making a Decision

If you invest in your 401(k) and stay invested, your account balance can grow to $1 million or more. According to CNBC, about 72,000 people have reached the status of 401(k) millionaire at the end of 2014.

But before you can accumulate a healthy retirement account balance, you need to decide how to invest your 401(k) dollars. Based on my readings, many struggle in selecting investments. Here are action steps that may bring clarity and offer guidance in making a decision:

Wealthfront Review

Investment services offered by Wealthfront are targeted to the busy investor who wants to 1) develop a diversified portfolio; 2) save money on taxes through tax-loss harvesting; and 3) outsource day-to-day investing decisions.

What is Asset Allocation?

When I’ve read about investing and considered the services of investment advisory firms, I’ve often encountered the term of asset allocation.

What is asset allocation? A simple definition: it’s putting my proverbial eggs in multiple, uncorrelated baskets. For an investor, this process involves allocating investments among the big three types of asset classes: equities, fixed income instruments, and cash and its equivalents.

Managed Portfolios: What They Are and Why You Should Know

Managed portfolios seem to becoming more popular as more people want to invest, but aren’t sure how.

The practice of portfolio management has been around a long time but has more recently become part of the mainstream as portfolio management services are now accessible to the average person (who may have just a few thousand dollars to invest). Companies like Betterment and WealthFront (also called robo advisors) have begun to popularize the concept.

What is a managed portfolio or what are portfolio management services? Generally, a managed portfolio is one in which a professional manages investments on a client’s behalf. Typically, the client will pay a flat or sliding-scale fee based on the portfolio size. The fee is calculated by multiplying a percentage (such as 0.25% or 1.0% set by the investment or brokerage firm) by the assets under management (AUM). The AUM represents the dollar value of investments being managed.

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