$SCHD has been a popular punching bag of lateā¦ Reading plenty of posts saying things like āI was buying SCHD, but itās going nowhere so I sold it & buying $SCHG insteadā, neglecting the fact SCHD is trading towards its low historical valuation @ 12.5x P/E while SCHG is trading near its high historical valuation @ ~30x P/E. There's no denying SCHD has been underperforming of late, but that's exactly the reason I've been buying. You don't get to buy a fund w/high quality holdings trading at depressed valuations that often. I also think it's a solid purchase in a market that's tenuous at best IMO... Iāll flip the script & do the same w/SCHG when it's out of favor too... Full Disclosure: I've owned $SCHG for close to 16yrs & $SCHD for 14yrs, both purchased just after their respective inceptions. I've continued adding to both at differing times over the years & I've never sold a single share of either & have no plans to. Will I maximize gains owning SCHD? Absolutely not, but that's never been expected of SCHD. FWIW... $SCHG is currently my largest ETF holding and $SCHD is #3 right behind $VIG...
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10 Comments
Ian S@ian_s Ā· 9mo
That P/E and holding such high quality companies, schd is at a decent entry level right now! Thanks for the details, Scott.
Clantosa @clantosa Ā· 9mo
Buy low sell high but people want to buy high to follow the tail end of a trend that's already passed
Marc Beavis@marcb Ā· 9mo
I always know that when one of your posts starts with āGoing Against Market Sentimentā¦ā itās going to have some wisdom embedded in the post. ļ漚
