Is the Dow dividend 2-2-3-4-5 strategy still valid?
I just read the Motley Fool Investment Guide published in the mid-90s where they suggest what seems to be a winning strategy for beating the Dow. Select the top 10 yielding Dow stocks, rank them according to stock price then create a portfolio using equal dollar amounts invested into the five cheapest stocks from this group. For even better returns, it was suggested deleting the cheapest stock and doubling up on #2 (hence 2-2-3-4-5). After one year and at each anniversary afterwards, cash out then repeat the strategy with the current cheapest Dow high yielders. In the book, this strategy was backtested 20 years and found to achieve a 25% pa average return from 1973-1993. My question is: Has this strategy been backtested more recently and is it still a valid investing method today? I am planning to invest a significant part of my portfolio in the Dow dividend stocks following this strategy but thought I'd better get an update first from the Foolish community. Any thoughts?