I want to know, seriously? Is it the dividend (distribution)? The performance? The low fees? Or did you eventually see enough people on the internet say something like, “$SCHD is the best dividend ETF ever". And ,you figured, 400,000 Redditors and YouTubers couldn't possibly ALL be wrong? 😅 Either way, there's something about SCHD that I believe many investors don't fully appreciate. Recently, 22 stocks disappeared from the ETF.... big names like Cisco and AbbVie... bye bye 👋 And they weren't replaced with the same old names So us investors need to ask ourselves....If I'm buying SCHD for the long term... do I actually know what I'm buying for the long term? The reason is that SCHD is NOT a static portfolio of dividend growth stocks. And depending on WHY YOU OWN IT, some of what I found might matter more than you think. For example, here's something interesting about its performance. SCHD looked remarkably strong when the market was getting hammered.... Then the market environment changed... And so did the SCHD story. Why... why, WHY? You need that answered And then there's the dividend (distribution).... I've seen SCHD described as the perfect retirement ETF because you can supposedly live off the income and never sell a share... Sounds like the perfect solution to a difficult problem. However... is that actually the best way to think about retirement income? And if you're Canadian, there's another question you should probably ask before buying it... Which account is the best for a high yield ETF like SCHD? In my latest deep dive, I put SCHD under the microscope... No “SCHD is amazing, buy it now” nonsense that you see on tikytoktok from me as you know 😂 I just go into the methodology, the numbers, the risks, the tradeoffs and my honest verdict/opinion at the end... ALWAYS remember, even a beautiful, high quality shoe can still be a TERRIBLE FIT 👠 So why are YOU invested in SCHD or why are you thinking about it? https://youtu.be/B2kxkIyHjPk
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38 Comments
Andrew Whiteside@dumbmoneyrewired · 9h
I used SCHD as a bond proxy. Let me explain - It holds companies that grow their dividends and in turn SCHD has consistently grown its dividend. It rarely has massive gain years or massive loss years. So i treat it as a fairly safe play as it holds some serious bell weathers of the economy. I feel holding bonds, cash or cash equivalents lose buying power over the years. I feel that SCHD at bare minimum keeps up with inflation. So growing cashflow and using it as a fairly safe and cheap option is my go to. I do not expect SCHD to retire me or retire me early i just expect it to be act as a protective asset. If i was building up a position in my teens it would be a completely different story, much like warren buffets position in KO paying something crazy like 50% yield...most investors just dont have the time horizon in SCHD to make it that much of a game changer. So in most peoples time horizons holding growth would massively out perform SCHD. So long story short, i use it as a bond, cash / cash equivalent proxy.
Silver BTC King@silverking · 13h
Diversification outside the standard sp500 funds and a growing dividend
Moe @moe_on_margin · 12hEdited
I personally like it because: 1. it is low beta and very low correlation to VOO/QQQ, so offers strong diversification. 2. It is a great performer in stagflationary environments given its composition skews high towards consumer staples and defensive stocks and that has seems to be well reflected in it's YTD performance at +27% beating most other index ETF. 3. Very low fees, decent income through dividends (not very exciting for me, but doesn't really hurt) My understanding is this year’s reconstitution changes have been the highest in their history which I take as a one-off and from what I've read there's been a big reduction to the energy sleeve which had become oversized after the massive gains in XES & XOP companies which in turn results in lower dividends, please feel free to correct me if my understanding is not accurate. But in short I don't foresee this as an ongoing change in thesis and since it's a passively managed fund these changes are somewhat automated by design, no? With where I personally see the Macro environment heading SCHD creates a pretty strong shield and stands it’s ground pretty well in high inflation, stagflation, recession... it underperofms obviously in the wild Tech runs... but in my view we are nearing the end of that cycle soon anyways. Love your content, loved this post and thanks for the nudge to think about why you own it. I tend to talk to much about topics I like, so sorry if I went on for too long
Renee Glover@tradingdiva · 12h
I bought it because of the growing share price and dividend. Now, I am not sure why I own it.
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