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Asset Allocation

Dogs of Nifty 50

Dogs of the Dow is a very old strategy strategy popularized by Michael B. O’Higgins in 1991 (Wiki Link). The concept if you aren’t too interested in checking out the link is to buy the top dividend yielding firms and holds for a period of 1 year before a new set is selected and invested therein.

On the US markets, this strategy has shown promise as per stats (Link).  I haven’t back-tested the same on Nifty 50 though I would assume that the risk of such a portfolio would not be too different from holding a portfolio of all Nifty 50 stocks.

So, here are the Dogs of Nifty 50. Will check back on this in Jan 2018 to see both the performance and the changes required for the forthcoming year.

 

Discussion

2 Responses to “Dogs of Nifty 50”

  1. Notice a small problem with the construction. Coal India is clearly an outlier. Far far away from rest of the group. It almost implies that Coal India is going to dominate for ever.

    Posted by S K Rahman | 8th January 2017, 7:37 pm
    • Hence better to go in with a Equal weighted Investment. At 5 or 10%, risk way lower than if one invested in a similar portfolio using either Market Cap Weighted or Price Weighted.

      Posted by Prashanth_admin | 11th January 2017, 8:23 am

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