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The Daily Dow LEXINGTON, Ky. (June 6): For those of you following along with the Current Beating the Dow order, you'll notice a change occurred today. General Electric's sharp rise today dropped it off of the list of the ten highest yielding DJIA stocks.
There's actually a tie for the final spot on the new list between two stocks, AT&T and Caterpillar, both of which have a 2.16% dividend yield after today's session. Using the standard method Michael O'Higgins outlined in his book, Beating the Dow, one breaks the tie by choosing the stock with the lower share price, in this case, AT&T.
So, GE falls off of our top ten list and AT&T replaces it. It's likely that several such changes may occur in the next several trading sessions since four stocks have virtually identical yields around the 10-13 spots on the list.
And because of AT&T's relatively low share price (low compared to the others in the top ten, at least), it becomes one of the current Foolish Four stocks, landing in spot number 4.
Changes in the list's composition always bring up the question for recent investors, "what if I just bought GE? Should I sell it and replace it with AT&T?" No! Hold whatever stocks are in your group the full year. A minor change in a stock price can shuffle the order back and forth several times without anything really significant having taken place for the companies. Don't worry about it. Stick with the disciplined approach and hold your stocks for the year, regardless of what happens. And enjoy the fact that you have decades of measurable results behind you to tell you that you're investing well.
Transmitted: 6/6/96
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THE FOOLISH FOUR MODEL (6/6/96) |
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