Investors are often involved in a quest to beat the market. That is, they want to make investing decisions that deliver performance results better than a passive investing strategy, such as one involving the purchase of market-index funds.
The Dogs of the Dow represents an investing strategy developed with the goal of outperforming the Dow, a market index. It involves using a simple formula to identify the top 10 undervalued stocks among the Dow holdings, which consist of 30 blue-chip stocks. There are derivatives of this strategy, also designed in hopes of outperforming the market.