Effectiveness of ‘Dogs of the Dow’ Investment Strategy in the Indian Context | Zendy

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Effectiveness of ‘Dogs of the Dow’ Investment Strategy in the Indian Context

Author(s) -

Chinmoy Sahu

Publication year - 2001

Publication title -

vikalpa the journal for decision makers

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.241

H-Index - 23

eISSN - 2395-3799

pISSN - 0256-0909

DOI - 10.1177/0256090920010106

Subject(s) - portfolio , stock exchange , investment strategy , dividend , stock (firearms) , financial economics , context (archaeology) , index (typography) , economics , business , computer science , monetary economics , finance , engineering , geography , market liquidity , archaeology , mechanical engineering , world wide web

Investors have always yearned for ways to beat the market. In recent years, one popular strategy among American investors involves a portfolio comprising of the ten highest yielding stocks selected from among the 30 stocks in the Dow Jones Industrial Average (DJIA), one of the most popular stock indices of the US. Such ft portfolio based on the Dow Dividend Strategy (DDS) came to be known as the ‘Dogs of the Dow.’ Portfolio of ‘Dogs of the Dow’ has been found to outperform the Dow on numerous occasions. This paper studies the effectiveness of such a strategy in the Indian context by applying the same strategy to similar stocks in the 30- stock Sensitive Index (Sensex) of Stock Exchange, Mumbai (BSE) and evaluates the performance of ‘Dogs of the Sensex’ portfolio during the late 90s.

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