Dividend yield strategies: Dogs of the Dow and Hounds of the Bay

Over the years ‘Dogs of The Dow’ strategy has become an increasingly popular and intensely argued subject for both practitioners and academicians. This thesis examines the multifarious aspects of the ‘Dogs of The Dow’ (DoD) strategy and highlights both the euphemism of the believers and reservations of the skeptics. Further on, we empirically test the DoD strategy over a 16-year period from 1990 to 2005. A parallel study, Hounds of The Bay (HoB) is also carried out for the Canadian markets, over the same time period, to test if such a dividend yielding strategy has merits outside of the US market. Overall based on our research and empirical tests, we believe the effect of such a dividend yielding strategy has diminished in the recent years in both US and Canadian markets, while in the Canadian context it may be more subtle.