The ‘Dogs of the Dow’ rule holds that the worst stocks usually turn around. If that applies to sectors, and the funds that track them, then energy shares will benefit
It’s one of Wall Street’s best-known maxims: The “Dogs of the Dow” principle, holding that Dow Jones Industrial Average companies whose stocks underperform the broad market in a given year but are basically healthy typically will bounce back and maybe even outperform the market the next year. And it generally holds true.
But does a similar rule apply to sectors of the S&P 500, and sector-based mutual funds and exchange-traded funds? Inquiring energy investors, in particular, may want to know.