EMPIRICAL ANALYSIS OF THE IMPLEMENTATION OF THE DOGS OF THE DOW STRATEGY AND ITS VARIATIONS IN INDONESIA STOCK EXCHANGE (CASE STUDY OF IDX30 INDEX THE PERIOD 2012-2022)

• Main Author: Purnomo, Heri
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/75568
• Institution: Institut Teknologi Bandung

The role of the presence of digitalization and information technology in the midst of economic disruption has an impact on lifestyles and attitudes that are more conscious of investment. Optimizing and accelerating digital transformation, synergizing and collaborating between all capital market stakeholders who continuously carry out socialization and education, has recorded rapid growth in the number of investors. This confirms the reflection of the beginning of societal transformation, from not only being fond of saving but also becoming an investing society. According to data from the Indonesia Stock Exchange, as of January 31, 2023, the number of investors in the capital market has increased to 10.4 million Single Investor Identification (SID) and is projected to continue to grow to 13.92 million by the end of 2023. But increasing inclusion alone is not enough, because based on a survey by the Financial Services Authority (OJK) in 2022, the level of public access to investment products is higher than their level of understanding, so an increase in investor literacy is urgently needed. The most basic literacy is the ability to prepare investment strategies and make investment decisions whether to sell, buy or hold assets. Active investors, both experienced and novice, are always seeking simple, low-risk investment strategies that have been proven to work and provide returns higher than the market average. One of the strategies to consider is the Dog of The Dow strategy. The Dogs of The Dow beat the S&P500 and DJIA in the twenty (20) year period since the start of the millennium. Always trying to improve existing strategies, investors have developed several variants of the Dogs of the Dow strategy. In this evaluation study, back testing the historical performance of various variations of the Dog of the Dow strategy was carried out using historical data on the IDX30 stock for the period 2012 to 2022. The evaluation study results showed that this dividend yield-based investment strategy can provide positive performance and is also easy to implement and shows that most of the portfolio stocks that fall into the Dog of The Dow category and its variants outperform the IDX30 index for the 2013-2022 period and can be recommended for application by investors on the Indonesian stock exchange.