A Study on Effectiveness of the “Dogs of the Dow” Strategy for the Thai Stock Investment

Tissayakorn, Kittipong; Shen, Yu; Qiu, Mingyue; Akagi, Fumio

doi:10.7763/ijimt.2013.v4.406

Cited by 5 publications

(3 citation statements)

References 2 publications

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“…Using data in Pakistan, Soomro Haroon (2015) also showed that the DoD theory works well with some limitations applied. Earlier similar results were found in a study by Tissayakorn et al (2013), who showed the outperformance by the DoD theory in the Thai stock market. Chong and Luk (2010) also confirmed the theory using blue-chip stocks of the Hang Seng Index in Hong Kong.…”

Section: Introductionsupporting

confidence: 85%

“…However, there is no robust consensus on the validity of the theory in the market. Some have found the theory to be well confirmed (Chong & Luk, 2010;Tissayakorn et al, 2013;Soomro & Haroon, 2015;Yan et al, 2015), whereas other studies contradict the theory (Domian et al, 1998;Hirschey, 2000;Da Silva, 2001;Kim, 2019). Yan et al (2015) supported the validity of DoD theory by demonstrating higher returns upon following this strategy than the average market return in Taiwan.…”

Section: Introductionmentioning

confidence: 91%

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Does the Dogs of the Dow Theory Work at the Sectoral Level?

Kim¹,

Nguyen²,

Arbet³

2020

IJEF

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One of popular theories in technical analysis is the Dogs of the Dow (DoD) theory. According to this strategy, the average market can be outperformed using 30 firms of Dow Jones Industrial Average (DJIA) index. Since DoD was introduced, there have been numerous studies on the validity of the theory. However, only contradicting results have been found, so the research has produced no robust consensus on the theory. In addition, most of the research was performed using aggregate stock market data. The purpose of our research is to determine whether the DoD theory is valid at the sectoral level. We find that returns of top 5 highest dividend-yield firms are higher than average return of each sector. However, the additional returns of those 5 firms are not meaningful enough if we take into account tax on profits and trading costs, which does not validate the DoD theory at the sectoral level.

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Section: Introductionsupporting

confidence: 85%

Section: Introductionmentioning

confidence: 91%

Does the Dogs of the Dow Theory Work at the Sectoral Level?

Kim¹,

Nguyen²,

Arbet³

2020

IJEF

View full text Add to dashboard Cite

show abstract

“…Many researchers have worked on the validity of the DoD theory, but with a lack of a strong consensus. Using data in Taiwan and Thai stock markets, respectively, Yan et al (2015) and Tissayakorn et al (2013) showed that the DoD strategy earned higher returns than the benchmark in each country. Soomro and Haroon (2015) also confirmed that the DoD strategy outperformed the benchmark in the Pakistani market, with some limitations.…”

Section: Introductionmentioning

confidence: 99%

The Dogs of the Dow Theory – Is It Valid?

Kim¹

2019

IJEF

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The Dogs of the Dow theory has been a popular tool in the financial market. But while the theory is simple, there have been mixed findings on its validity. Using U.S. data from 2000 through 2017, this paper identifies how consistently an investment strategy that follows the Dogs of the Dow theory outperforms the average market. The results show that the theory has not worked well in the recent U.S. market when trading costs and taxes are included. Rather, holding an equally weighted investment of all firms is more likely to outperform the Dow Jones Industrial Average index and the Dogs of the Dow strategy in the long term.

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Comparison of Dog's of the Dow Strategy

Soomro¹,

Haroon²

2015

ujm

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Investors always try to find the ways to beat the market. In recent years, one popular strategy among International investors involves a portfolio comprising of the ten highest yielding stocks selected from among the KSE all share index stocks in the Karachi Stock Exchange-KSE, (one of the most popular stock indices of the Pakistan). Such 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. The proposed study will extend the well documented Dogs of the Dow (Dow Dogs) strategy to Pakistan stock market. Purpose of this research is to compare the impact of DoD(KSE) portfolio performance with other developed and underdeveloped countries. The result shows that Pakistani Stock market faces the same external conditions like other developed and under developed countries. In conclusion, the Dogs of the Dow strategy can be a successful investment strategy in the Pakistani market but with some limitations.

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A Study on Effectiveness of the “Dogs of the Dow” Strategy for the Thai Stock Investment

Cited by 5 publications

References 2 publications

Does the Dogs of the Dow Theory Work at the Sectoral Level?

Does the Dogs of the Dow Theory Work at the Sectoral Level?

The Dogs of the Dow Theory – Is It Valid?

Comparison of Dog's of the Dow Strategy

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