HowardCohodas
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Anyone have any of their assets devoted to using The Dogs of the Dow strategy?
Dogs of the DOW
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DionysusToast
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Nope - but heard of it.
It should be very easy to backtest - still it's 30 huge stocks, so it's more than likely going to go through long phases of nothing.
It should be very easy to backtest - still it's 30 huge stocks, so it's more than likely going to go through long phases of nothing.
wackypete2
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This strategy has been around at least since the 1980's, probably much longer, but takes a huge investment to follow it on a practical level. I remember a derivative of this using LEAP options. I can't recall the exact name of the strategy. That may be more up your alley, Howard. Maybe some googling will help.
Peter
Peter
HowardCohodas
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I'm actually quite familiar with this strategy and variations/enhancement using options. I do not use this strategy. I am considering a derivative called shareholder yield.
Using Shareholder Yield, which I won't define here, we get the following top ten.
PHP:
BAC 21.7%
TRV 20.8%
HPQ 9.8%
WMT 9.2%
PG 7.6%
IBM 7.6%
MSFT 6.8%
HD 6.2%
T 5.7%
VZ 5.5%
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DionysusToast
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Howard - why would you use a strategy that limits you to 30 stocks? Or why limit your strategy to 30 stocks?
Why not choose a basket of stocks that fit a specific profile that you want to trade? Why not have a basket that of stocks that better represents all sectors? Why not have stocks of different sizes, instead of the behemoths in the DOW 30?
I can't really think of a single reason to limit any strategy to these 30 stocks. There is nothing inherently magical about the way these stocks make it into the DOW. In fact, you could argue that by the time you make it into the DOW 30, upside potential is limited by sheer size alone.
It makes sense to include these 30 stocks in an index like the DOW because they wont be growing much independently of the markets in general. Do we think that GE is going to grow 30% when the market is growing 2%? Very unlikely unless some new tech comes out like fresh air on the moon, in which case GE would probably grow like a weed.
Personally - I think you'd do better with a 'dog' strategy with a selection of stocks by sector with the backup of some due dilligence that doesn't get you into stocks because they are fundamentally unsound. You could benefit from sector rotation but not get killed because some stock has become a total pup.
Why not choose a basket of stocks that fit a specific profile that you want to trade? Why not have a basket that of stocks that better represents all sectors? Why not have stocks of different sizes, instead of the behemoths in the DOW 30?
I can't really think of a single reason to limit any strategy to these 30 stocks. There is nothing inherently magical about the way these stocks make it into the DOW. In fact, you could argue that by the time you make it into the DOW 30, upside potential is limited by sheer size alone.
It makes sense to include these 30 stocks in an index like the DOW because they wont be growing much independently of the markets in general. Do we think that GE is going to grow 30% when the market is growing 2%? Very unlikely unless some new tech comes out like fresh air on the moon, in which case GE would probably grow like a weed.
Personally - I think you'd do better with a 'dog' strategy with a selection of stocks by sector with the backup of some due dilligence that doesn't get you into stocks because they are fundamentally unsound. You could benefit from sector rotation but not get killed because some stock has become a total pup.
