Foolish Four (2024)

Table of Contents
References[] External links[]

The "Foolish Four" is a discredited[1] mechanical investing technique that, like the Dogs of the Dow, attempts to select the member stocks of the Dow Jones Industrial Average that will outperform the average in the near future.

To identify the "Foolish Four," an investor determines the current dividend yield and current price for each of the 30 stocks comprising the Dow Jones Industrial Average. Then, the yield for each stock is divided by the square root of the stock's price. The stocks are ranked from highest to lowest using the number resulting from the division. The stocks ranking the second highest, third highest, fourth highest, and fifth highest in equal dollar amounts are bought. The highest ranking stock is not bought.

Subsequent review of this technique[1] suggested that it was unlikely to outperform a simple indexing strategy, and, after an extended period of resistance, the Motley Fool discontinued its promotion in December 2000.[2] [3]

References[]

  1. 1.0 1.1 Script error: No such module "citation/CS1".
  2. Script error: No such module "citation/CS1".
  3. Script error: No such module "citation/CS1".

External links[]

Community content is available under CC-BY-SA unless otherwise noted.

Foolish Four (2024)
Top Articles
Latest Posts
Article information

Author: Clemencia Bogisich Ret

Last Updated:

Views: 5932

Rating: 5 / 5 (60 voted)

Reviews: 91% of readers found this page helpful

Author information

Name: Clemencia Bogisich Ret

Birthday: 2001-07-17

Address: Suite 794 53887 Geri Spring, West Cristentown, KY 54855

Phone: +5934435460663

Job: Central Hospitality Director

Hobby: Yoga, Electronics, Rafting, Lockpicking, Inline skating, Puzzles, scrapbook

Introduction: My name is Clemencia Bogisich Ret, I am a super, outstanding, graceful, friendly, vast, comfortable, agreeable person who loves writing and wants to share my knowledge and understanding with you.