The Effectiveness of Highly Dividend Investment Strategies in the Russian Stock Market

This research work contains a review and subsequent analysis of existing global practices for the formation of effective highly-dividend investment portfolios consisting of shares of public companies. It was no coincidence that the Russian stock market was chosen as the main and only platform for testing such strategies, because due to the difficult economic situation in the country (falling real incomes of the population, low interest rates on deposits with banks, etc.), the population’s demand for simple and balanced in terms of risk-return instruments for preserving and enhancing personal savings. It is also important to note a considerable amount of the author’s research in this and related areas, which, coupled with the growing demand for high-yield investment strategies in Russia, justifies the relevance of the chosen topic. The fundamental and, in a sense, classical theory of forming highly dividend investment portfolios is Dogs of the Dow, which is widely known thanks to Michael Higgins' book “Ahead of the Dow” (1991). Many of the articles that I have studied are based precisely on the “Dogs Dow” theory with its subsequent modification by adding filters by the financial indicators of the company. The scientific community has at its disposal a large number of similar works with various filter variations, however, the aim of this study is to create a new symbiosis by introducing the organization’s life cycle theory into a well-established highly divisible investment strategy using certain filters for financial activities of companies selected in the portfolio. The main tasks of the current work are: • Study and analysis of existing popular and effective highly dividend strategies used both in different countries of the world and in Russia • Development of a new model for the formation of an investment portfolio, combining the organization’s life cycle theory and the best practices of “classic” high-dividend strategies using filters by the company's financial indicators • Presentation of the results obtained (as well as comparison with similar strategies and other financial instruments) and general conclusions on the work done From the point of view of scientific novelty, this study is one of several (if not the only) cases of applying the organization’s life cycle theory in combination with a model of highly dividend investment strategies to form effective stock portfolios in the Russian stock market. Such a model can find practical application by potential investors in the Russian market for profit.