Dogs of the Dow

 

Michael O’Higgins 1991 strategy proposed that allocation in the ten highest dividend paying Dow components is an approach to beat the business cycle. For us outperformance is not just about dividend as a fraction of price but also about absolute performance. A worst performing asset is a potential outperformer and vice versa.
Higgins made entry in his dividend strategy simple by specifying it as an annual selection. The annual selection assumed a yearly cycle. Unlike annual cycles, Jiseki performance cycles work over multiple degrees of time. So entry for us is linked with the holding period (risk profile) of the investor.  The entry for performance cycles can also be judged visually when the Jiseki cycles turn up.
Now for us the other Dog of the Dow, ProShares Short Dow30 ETF is getting ready to outperform. Not only it’s in the worst 20% among 1000 global composite asset universe over an intermediate period but also the Jiseki cycles are oversold. We anticipate a trading reversal soon on the DOG.