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The "Dogs of the Dow" Myth

Mark Hirschey

The Financial Review, 2000, vol. 35, issue 2, 1-15

Abstract: The "Dogs of the Dow" (or "Dow Dog") investment strategy, is a popular investment approach that promises huge abnormal returns for investors in the ten top yielding stocks from the Dow Jones Industrial Average (DJIA). However, periods of evident outperformance are balanced by periods of conspicuous underperformance. When strategy returns are adjusted for taxes and rebalancing costs, Dow Dogs perform in line with the DJIA over the 1961-98 period. As a result, there is no robust evidence of an average return anomaly tied to Dow Dogs. Copyright 2000 by MIT Press.

Date: 2000
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