dogs of the Dow

Dogs of the Dow is a fairly simple investment strategy.

Basically buy the worst performers (bottom third) of the stocks that make up the Dow Jones Industrial Index (DJIA), hold them for a year, sell them, and do it over and over again.

To me "Worst Performing" is simply a matter of share price movement, but many others judge it in terms of Dividend Yields.

In my younger days, I was schooled in the "Efficient Market" Hypothesis and would of told you a strategy like Dow of the Dogs would not work because the expected effect would already have been priced in.

In the years since, research by Behavioral Economists has indicated that the Efficient Market Hypothesis are not able to explain the out performance that the Dogs of the Dow investment strategy appears to deliver.

So each week, I am going to review some of the Dogs as I build my portfolio and monitor their performance. Lets see if it really does tend to outperform the market.