Can the ugliest ASX 200 dogs of 2020 turnaround in the New Year?

This is the season many investors will be looking at punting on the worst performing ASX stocks of the year in the belief that most will stage a turnaround in 2021.

It’s a tradition made popular by the “Dogs of Dow” theory, although adopting this strategy for the ASX is fraught with danger.

But there is a way to minimise the risk and get this seasonal phenomenon working in your favour.

What drives the Dogs of Dow

Before I get into that, it’s important to know why this strategy can work in the US but not necessarily here.

For those who are unfamiliar with the Dogs of Dow, it’s driven by the belief that businesses work in cycles. So if a stock on the Dow Jones Industrial Average (INDEXDJX: .DJI) slumps in one year,…