Well what better time to provide a final update to my Dogs of the FTSE portfolio than when everything seems to be spiralling downwards into despairing oblivion!

Dogs of War

So one year on and my 5th experimental portfolio has, like many other portfolios, seen far better days.

As a reminder, here’s the Dogs of the FTSE strategy:

1. Choose the ten FTSE 100 shares with the highest yield (subject to my criteria*)
2. Invest equal amounts in all ten shares
3. Hold for a year (give or take a week)
4. At the end of the year, sell the ones no longer in the top ten, replace with new shares with highest yield
5. Repeat from step 3

[*criteria being that shares already in my portfolio are not included, nor any where a dividend cut has been announced]

Here’s how the 2021/22 portfolio looked as at 10th June 2022:

Over the same period, the FTSE 100 Total Return was 3.45%.

OUCH – look at those losses, especially the -85.96% loss suffered by Polymetal International, caught in the crossfires of the Ukraine war.

If I remove Polymetal, it would have been pretty much evens at 0.07%, and a nice 8.10% including dividends, but that’s not how it works, the strategy meant that I had to live with the bad Dogs as well as the good. Hey ho!

Five-Year Experiment

So, did the Dogs beat the markets? Looks like we might need a VAR check…

Year 1 (2017/18): Dogs 1% vs FTSE 100 TR (for same period) 0.85% – 1-0 Dogs (VAR check….)

Year 2 (2018/2019): Dogs 16% v FTSE 100 TR -2.02% – 2-0 Dogs

Year 3 (2019/2020): Dogs -11.7% v FTSE 100 TR -9.6% – 2-1 Dogs

Year 4 (2020/2021): Dogs 21.78% v FTSE 100 TR 18.68% – 3-1 Dogs

Year 5 (2021/2022): Dogs -0.26% v FTSE 100 TR 3.45% – 3-2 Dogs

Why???

Until recently, I hadn’t really considered why I was even running this experiment.

Mostly it was out of curiosity, I wanted to see if the strategy would work, and I thought it would be fun (spoiler – it was! 😀 )

However, ultimately, I think I was seeking a strategy which took the emotions out of investing, a strategy which had an element of ‘spoon-feeding’ – here I was being told what to buy and when to buy, and what to sell and when to sell. Easy peasy investing!

I have to say during times of volatility, my Dogs portfolio was the only part of my investments which I could look at and honestly shrug without a care, because I knew 100% I wouldn’t be doing anything with it since the strategy didn’t allow me to.

With the other parts of my portoflio, there was always the choice to do something and we all know that in investing, it’s not always easy having to decide to do nothing.

Conclusion

Whilst the strategy took all the emotion and decision-making out of investing, it was totally inflexible in that you couldn’t make any changes to the portfolio in reaction to world events, eg war/pandemic, although I guess that’s the whole point of it!

You could argue that if not for the pandemic or war, the outcome might have been different but there’s always some other world crisis which jiggles the markets in some way.

What Next?

My latest Dogs of the FTSE experimental portfolio was set up in June 2021, so it’s time for an update.

I appear to have timed it just as the markets have gone a bit rubbish.

Here’s a reminder of the Dogs of the FTSE strategy (which is based on the US Dogs of the Dow strategy):

1. Choose the ten FTSE 100 shares with the highest yield (subject to my criteria*)
2. Invest equal amounts in all ten shares
3. Hold for a year (give or take a week)
4. At the end of the year, sell the ones no longer in the top ten, replace with new shares with highest yield
5. Repeat from step 3

[*criteria being that shares already in my portfolio are not included, nor any where a dividend cut has been announced]

Note that this is part of my ‘fun’ portfolio and represents less than 1.5% of my Future Fund – it is not what I do as a main investing strategy. All dividends received are reinvested.

In the Doghouse

The mutts are all looking rather poorly, drowning in a sea of red numbers.

The only two Dogs showing any gains are the two energy stocks (National Grid and SSE), flying in the face of a potential gas shortage crisis.

Over the same period, the FTSE 100 Total Return was -0.76% so the Dogs are doing terribly at -10.71%.

Even with dividends received included, it’s a loss of –8.33%, so not a great start.

Will be interesting to see how they survive the winter…

Random Shares

My Random Share Portfolio is made up of free shares awarded to me whenever someone signs up to Freetrade* via my affiliate link, bagging us both a random free share (worth between £3 and £200) in the process.

A couple of the freebies I received recently – thanks to whoever signed up via my link!

Here’s the full portfolio.

I’ve kept most of the shares, occasionally selling when the odd one or two gain by >20%.

Money from the sales of any random shares are chucked into my ISA, with a few quid going towards my Winter Rock Associates Fund 😉

My last Dogs of the FTSE experimental portfolio didn’t do too badly despite volatile markets during uncertain times.

Things got a bit hairy on occasion, with the markets all over the place, but I continue to follow the strategy as an experiment, documenting the bad times as well as the good.

As another reminder, here’s the Dogs of the FTSE strategy:

1. Choose the ten FTSE 100 shares with the highest yield (subject to my criteria*)
2. Invest equal amounts in all ten shares
3. Hold for a year (give or take a week)
4. At the end of the year, sell the ones no longer in the top ten, replace with new shares with highest yield
5. Repeat from step 3

[*criteria being that shares already in my portfolio are not included, nor any where a dividend cut has been announced, prior to purchase]

The Dogs of the FTSE strategy is based on the original Dogs of the Dow strategy.

Note that this is my ‘fun’ portfolio and represents less than 1.5% of my Future Fund.

New Pooches

Time to set up my new Dogs of the FTSE 2021/22 portfolio! [I set this up in June but only getting round to posting about it now]