Free Financial Lessons

Financial Basics, Tutorial #5 Dogs and cats

This video tutorial is available for watching at YouTube or here for free. My YouTube name is Featureman.

Dogs of the Dow is a phrase or financial term which is used to describe certain stocks which are considered good bets for gains. The Dogs of the Dow are the stocks in the Dow Industrial 30 stocks which have the highest dividend percentage on the last trading day of the year. In most cases this means that stock performed poorly in the year just ended. The stock still might be paying the exact same dividend amount it paid at the end of the previous years, but the stock price has dropped during the year and that dividend amount is now a higher percentage of the stock price. Such stocks are often good candidates for a recovery... but as always, be careful. Every few years some stocks are removed from the Dow 30 and some are added. The stocks which are removed will usually go down in value. If a stock is added, its price increases.


cat CAT is the symbol for Caterpillar. It was the first stock I ever owned. That company makes many products which would be considered to be construction vehicles. It also makes engines and very unusual products for special excavation and conveyance. It is often a good performer.

The "Dead Cat Bounce" is a phrase used to describe the comeback that an oversold stock often makes. If a stock gets some bad news one day, it can often become oversold by panic sellers. The next day that stock might make a slight upward move called the "Dead Cat Bounce." Search that phrase.

Dream big, but invest with caution

Chef Greyhound Bus Company used to have the symbol DOG. Now that symbol is for a fund which is more or less the opposite of the Dow 30 Industrial average. It is designed to do what the Dow 30 does but in reverse. If the Dow goes up 1 percent the DOG goes down 1 percent. If the Dow goes down 2 percent, the DOG goes up 2 percent with some slight variations. It is what is called a Bear Fund. It is also called an Index Fund, but instead of doing what the index does, it does the opposite. It is worth studying by searching the symbol at a financial site and learning about Bear Funds and Index Funds. Study before investing.