This is precisely why I'm a fan of "rules-based, formula-driven" ETF's The facts and math decide which stocks stay and which ones go, thus removing emotions from the process. Makes sense to me!
SCHD fund managers are bending the rules to satisfy whatever they want. They did it in last reconstitution and again this time. I think DGRO will outperform over next 5 years.
SCHD outperformed VTV over 5 and 10 years and is very low cost. Just had bad luck this year. Many of us have a boatload in the S&P500 index in 401k's, so not having apple, Microsoft etc as top holdings (if at all) in SCHD is a good thing. Still have the bulk of my $500k portfolio in SCHD.
I’m taking the hybrid approach, VOO, SCHD as my foundation, with growth like MA, UNH, HD. And slow growth like O and PEP. I have a 20 year time horizon. But the best part is I still enjoy my life while I do this. Travel, and buy ONLY things I love. It’s the best combo, plus I love the small victories with receiving dividends/dividend growth/share price appreciation.
SCHD is an excellent portfolio addition, but relying solely on it for retirement may not be optimal. I retired at 62, grew my portfolio to $1.5 million in 10 years starting with 35,000 through the help of an investment advisor and dividends now supplement my retirement income. Invest wisely, build your nest egg, and don't sell the chicken that lays the egg!
The decision on when to pick an Adviser is a very personal one. I take guidance from Amber Dawn Brummit to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
I believe SCHD is the ultimate fund I have 100% portfolio in it and holding 1315 shares with drip for the next 25 years so am not worried kind of set it and forget it
VOO is better diversified, while SCHD has more holdings concentration risk. i would think a blend of both based on one's personal situation is essential . in terms of profits, VOO has offered me more ROI as it is 22.25% up . i have $250k which i am looking to invest in covered call ETFS for dividend. Here for ideas...
Thanks for this informational video. I’ve been waiting to see a breakdown of the reconstitution. I’m sticking with SCHD. 530 shares and counting. Plan to be over 600 by the year’s end.
I’ve held this ETF for 6 years. Whatever their process is, it’s working. Consistent dividend growth. I bought about 200 shares during the downturn so I’m doing pretty darn good right now 😎 I was surprised to see MMM gone since it paid a decent dividend & was starting to recover. Won’t lose sleep over it, SCHD hasn’t disappointed me yet. I also have PEY which is a great monthly dividend ETF (Tracks NASDAQ)
Thank you for getting this video out so quickly! There’s definitely been some panic after this announcement came out. As always, you help talk us off the ledge! 😊 Holding strong!!
From a technology standpoint, Broadcom is recently hated by technology engineers and management due to it gutting of VMWare and other business practices. I go out of my way to not purchase network, server, or storage technology made by Broadcom's subsidiaries or if it's using of their chips. These budgets are in the millions and other are doing the same. I almost sold my SCHD due to their Broadcom holding. Glad to see it go.
Nothing to really comment on the restructuring of SCHD. But I did want to chime in that I just maxed out my 2023 and 2024 ROTH yesterday! VOO (30%), SCHD (33%), and QQQM (37%). 💰 I’ll have a pension and other revenue streams in retirement, so the ROTH is just play money. 👌
Good job, I’m trying to find stocks to invest im new to this. So far i invested in itot, and nvidia but I’ve been seeing a trend that people are investing similar to you
Hi Prof G! Thank you for this update! Ironically, I was just googling when this restructure was planned to happen….and here you are with it! I don’t specifically track every company in the SCHD portfolio. But…I can give you some airport ramp talk- I fly in to St Paul MN quasi frequently. 3M bases out of there. The line guys were talking, I believe, last summer about how their flight hours were being reduced. I don’t remember specifically…they may have also mentioned some furloughing in the flight department; which is usually an indicator.
Good morning. I hold a lot of SCHD and I've been adding to it. I've watched your analysis 2 or 3 times now. I understand the "why" of SCHD dropping bigger holdings like AVGO and MRK, but I'm skeptical of adding BMY and HSY, especially in the percentages listed. Also, this is one of the questions I have, is SCHD shoring up its positions in its other top 10 holdings? The swap outs don't add up, percentage-wise, unless that's what they're doing. If SCHD is shoring up its other top 10 holdings, it should reduce the angst some people are feeling. Personally, I hold over 230 shares of MRK in other accounts so this does not concern me. Also, as you indicated, I have AVGO in my S&P 500 funds and in my growth funds. So, again, no concern. Finally, I've started spicing up my dividend sector with DGRO and AVGO is one of their top holdings. Once again thanks for your analysis and insights. I'm staying the course. Cheers
I’m in love with your 3 fund strategy. I can’t help myself so put 5-10% into individual companies as well. Do you think it makes sense to split the 3 funds between different accounts? Currently I mainly have QQQ in my Roth, SCHD in my HSA, IYM/SPY in my 401k (my main job doesn’t have a spy choice and doesn’t allow us to control), and SPY in my taxable.
A lot of people seem to be panicking so this video makes me feel much better. I think it's just because people generally don't like change when it comes to their investments. Long term this ETF still looks like it's a great one to hold onto though.
Id love for the negative sentiment to knock it back into the high 60s, I didnt have a cash position last time and could only dca, now ive got a rolled over 401k to divey up. Sell! Sell!
@@Adam-ul2px@Adam-ul2px I dont think buying and selling SCHD has a very big impact on its price. It can only have up to 4% in a company and the price of SCHD is based on the collective price of all of the stocks in the ETF. The only way for the price to go into the 60s is if the weighted average of all of the stocks declines by 25% or so. This is generally why ETFs are more stable in general to invest into. That's very unlikely lol. Could happen in a crash of course.
Great video, thank you. I am, to be honest, unhappy that they eliminated AVGO , so I may sell a few shares of SCHD and invest it in AVGO, but I will have to do it slowly using DCA.
Trust the process. I have SCHD, DGRW, and SPYI as my 3 ETF portfolio, plus a handful of other stocks from when I first started out to round out some other sectors like REIT's.
I will be retiring in June 2024 at 67 1/2 and will be taking my SS at 70. So I am doing the following Bucket1 3 years of withdrawals in a Money Market fund assuming no SS This will protect me from a down market for 3 years until SS starts. Once SS starts the amount of money needed to handle a down market will be less. Bucket2 Enough in SCHD so I can live off of SS and dividends Bucket3 the remainder split between VOO and SCHG For Long term growth. Every year I will adjust my buckets to meet my cash flow needs. Please notice I am not using percentages for my buckets but instead using what my cash flow needs are.
Interesting and thanks for sharing. Individuals I follow would have more invested and not in cash, less than 2 yrs or lower. 2nd they would be uncomfortable with no bonds (or did I miss).
In my case when I retire I will be waiting 2 1/2 years before I start taking my SS. That is why I have 3 years in Money Market funds, to hold me over until I start getting SS. Once I start getting my SS my bucket1 will still be 3 years of withdrawals. But the amount I will need to withdrawal to cover my expenses will be very small so the amount of money in bucket1 will drop. I will give an example Assume I need $5,000 to live each month and my SS will be $3000 at age 70. (not my real numbers) So before I start getting SS I will need $180,000 (5000*12*3) in bucket1 After I start getting my SS I will only need $72,000 (5000-3000*12*3) in bucket1 My bucket2 only needs to also generate $24,.000 in dividends each year that I will spend if the market is down for more then 3 years. I also do not like bonds, instead of bonds I will have SCHD.
@@genglandoh Why wait on SS, it makes no sense to pull out $36,000 per year or $109,000 total. How many years of SS will you need to break even on this calculation. Plus the $109k can be in your funds creating more dividends or interest on some bonds.
Why wait to 70 to take my SS? Good question. I consider my SS as my most dependable income source, so I want to maximize it. It is guaranteed, has an inflation adjustment every year and grows 8% each of the 3 years until I am 70. It is like insurance it protects me from 1. A long bear market 2. My living past 90 3. My wife in the case I die first. So for me and my wife waiting to 70 makes sense.
I love this new SCHD more. It was a great idea to pull out AVGO due to low div yield. I already have AVGO in my VOO, SCHG and SOXQ. I will buy more SCHD now. Thanks for all of your research Professor.
I was roughly on track to have VOO (+FXAIX in my 401K) and then lots of SCHD. Then I thought, duhhh, I have some IRA accounts and also a standard brokerage account. I'm trying to put the SCHD over to the IRAs so I don't pay income tax on the higher divs now. I'll keep VOO in the brokerage. It gets dividends too, but a lot less.
Glad to see Tyson Foods out. AVGO, ehh, but I still have exposure to AVGO through SCHG (albeit not as much). I do wonder how much if any that will impact the overlap. Currently (formerly) 3%.
Very informative video. It reaffirms that diversity isn't just about overlap in holdings, but that funds have different strategies. As you mentioned, AVGO was let go from SCHD, but it's still in VOO as its index follows different rules.
hey prof G appreciate your informative videos. it helped me formulate my IRA portfolio. i was wondering if youve ever looked into NOBL ETF. I know it has a high expense ration but do you have any opinions on this fund?
I own a couple individual stocks but my portfolio is primarily VOO, SCHD, and SCHG. I am playing the long game. Hoping to build up to 100k soon! My portfolio is only 13k so far tho
My daughter just graduated her university & as a gift, I set her up a nice portfolio w/drip: VT, DIVO, SPLG, JEPQ, JEPI. I picked DIVO over SCHD only because it preformed closely the same, but at half the price per share. Peace.
Looking at the two ETFs, DIVO has a higher P/E ratio and also a higher expense ratio than SCHD. I believe SCHD provides a better balance with growth for capital gains and also dividend earnings for passive income. Not saying you’re wrong to purchase DIVO, just sharing my opinion. What do you think? Aside from similarity in performance, why did you choose DIVO over SCHD?
Is this in a tax deferred account? If not, she will have additional taxes to pay since some of those pay out as ordinary income. Buying her stocks is a wonderful thing. I hope she keeps adding to her account.
You have become my favorite investment mentor overnight. Clear explanations, and one can tell that you know what you're talking about. Simple yes or no question: my 3 ETF portfolio is s&p 500, Nasdaq 100 and a well-established semiconductor ETF. Would you call that too risky and not diversified enough?
Thank you so much! I’d say you do have a good amount of diversification but does push a bit more risky (but still way less risky than any individual stocks!)
Hey Prof. Dumb question. Why doesnt SCHD hold top dividend stocks like Coke or JNJ etc? You'd listed 7 top dividend stocks on one of your shorts but I dont find them in SCHD. Whats the rationale?
When I pick any ETF, I consider it that I'm actually paying that expense fee for their methodology and formula for picking and balancing their investments. I like SCHD's formula, and I'm sticking with them. Having said that, I have more than one dividend ETF within the dividend sector of my overall portfolio.
It's my core holding. I have enough SCHD for NOW, so I'm holding and putting new funds elsewhere. There does seem to be a flight to value starting. If that picks up, then the move up could be high in 2024.
I was very surprised they pulled AVGO. CINF was a nice addition; however, there are some selections that lack luster like COLB. I shaved some shares off my count and added to DGRO and SPYI. I will hold my remaining SCHD shares and DRIP them. I hold shares of AVGO and can tolerate the cut to avoid concentration risk. Any portfolio can afford some lower risk holdings. Thanks for presenting this today.
Another fund that is very similar to dgro and schd hybrid is is fdvv. The expense ratio is 0.15 like QQQM. Well that's my 2 cents. Great video by the way. 🎉
Hypothetical: Family puts 10k weighted in thirds into Prof Gs 3-ETF picks. Family plans to reinvest 10-15k per year (amount estimated to lower tax exposure) from a high-fee/low-to-moderate yield deferred comp 457 plan from a previous job in order to gain more control(and better yield) over the funds in the 457. (457 has no penalty for withdrawal, but funds are considered taxable income upon withdrawal from 457.) Is putting the yearly reinvestment directly into the same ETFs smart, or should the family look at spreading it out into other quality ETFs in the same categories as the initial 3?
There's a lot of overlap between those three if you add VOO. 60% of SCHG's holdings is in VOO and about 50% of SCHDs holdings are in VOO. Just making you aware of the overlap that would exist if you do.
Broadcom is a surprise but your explanation makes sense. I personally have it as an individual stock and sprinkled in my growth ETF part of my portfolio.
Awesome video! I’m a long time fan of SCHD lol… I’ll keep DCA this like I have been doing but actually with a higher frequency (weekly now) and consistently.
Professor G I’m a low income investor for the long term, I have a portion of my portfolio in VTI but I just found SCHX which is cheaper, covers the of what VTI has, and also have great return and growth numbers. Now I wonder, me as a low income investor, what should I do? Should I go for SCHX which it at $60+ or VTI which is at $200+?
Hello. I was wondering where people are investing SCHD. Are you buying it in a brokerage acct, a roth ira or a traditional ira. What would be the best acct for it? Thanks!
Hi Prof G. I have been following your videos and they have helped me understand the value of balanced etf investing. Question: A lot of videos say SCHD is better than VYM however VYM has outperformed SCHD this year and I am reluctant to let is go in my 3 ETF basket strategy. Here is the mix: 25% VOO, 25% SCHD, 25% VYM, 25% MGK. Your thoughts on this balance and if I should move money out of VYM and move it to SCHD and balance each out to 33.3%. Thanks so much for your videos!
One of SCHD dividend criteria is dividend yield. The lowest yield in the new SCHD portfolio is DKS at 2.07%. After huge price appreciation, WSM yield : 1.58% and AVGO 1.7%. Both do not make the dividend yield threshold. MRK yield is 2.54% but it was probably removed because it did not meet other SCHD criteria
SCHD is a contrarian play against tech it would seem. If the index filters work, as they should, this years holdings should work. My concern are regional banks. If Powell keeps rates high, will the volatility of the funds regional bank holdings cause issues?
👏🏼👏🏼Great video! I appreciate the level of detail you provide in a simplified and easy to understand way. You have made my investing life easier!!! Thank you.
I think the last couple recons have brought SCHD down in performance and dividend growth. And for the record, SCHD does NOT stick to its formula screening. They adjust it to include stocks that have cut their dividend in past 5 years or have lousy sales growth. Like Ford for example. Look at how many Financial stocks are now in this - 25+. And how did Ford stay included?? Their profits are zero and forecast negative growth with high debt. I sold 20% of my SCHD stock after last reconstitution and I'm selling more SCHD now and buying DGRO and VOO.
Professor G, can you make a video talking about JEPI and JEPQ advantages and disadvantages? I've been seeing a lot of people speak about those two ETFs with high dividend yields, but wanted to get your opinion about their reliability. Thanks.
Only reason I would sell SCHD is if they completely overhauled the tried and true formula to something I didn't agree with. Yeah it sucks to lose Broadcom but it's all by design. If you're still in doubt, compare SCHD to BND. Trust the process.
Good stuff right here. Any possibility to do a comparison between SCHD and USA or like fund? I read a Seeking Alpha article talking about how awesome USA is and how it’s outperformed SCHD. The research that I did showed that USA had a substantially better dividend yield but its appreciation was terrible by comparison. Personally I did not see the value of USA. I am curious to know your thoughts.
I inhered 256 shares of Merck in 2020; trimmed to 185 shares. I inherited 12 shares of Bristol Myers Squibb in 2020; increased to 65 shares. Sort of glad SCHD swapped out Merck for Bristol Myers Squibb.
@@kurniawanms2 I agree Merck is a good company but when I inherited this Investment Portfolio from my brother's estate in 2020 3 stocks made up 25% of the portfolio Merck being one of them. Along with PepsiCo Cincinnati Hometown favorite Procter & Gamble I trimmed all of them
@@diegocontreras3173 I have already upgraded my portfolio even further. Is there a downside to owning 100 ETFs vs a few? Mine is in a Roth so i don't have to worry aboiut taxes.
A little late but calling on the divy experts. I have 1,359 shares of SCHD in a taxable account (106K) with a 71.56 average. Since I live in Michigan and they tax dividends, how would you navigate this oversight and get the shares into a tax advantaged account intended to live on dividends for life? I'm 12 years from retirement (will be 62 1/2), and can contribute 16K per year into Roth IRAs. Note: I'm thinking selling each year and funding the Roths over time considering my goal. Thoughts?
I ivest in individual "fun companies" for the growth, and SCHD for the backbone. It was always supposed to be boring. Boring investments are safe investments.
Finally made it to 1000 shares today!!🎉🎉
저는 3,000주😊
Congratulations!
I have one share
Congratulations! I will get there soon. A little over half way there right now.
@@maximumoverload5134 Everyone starts with their first share. It's a marathon, not a sprint. Keep it rolling!
This is precisely why I'm a fan of "rules-based, formula-driven" ETF's The facts and math decide which stocks stay and which ones go, thus removing emotions from the process. Makes sense to me!
SCHD fund managers are bending the rules to satisfy whatever they want. They did it in last reconstitution and again this time. I think DGRO will outperform over next 5 years.
The math did not work out very well this year. Schd got crushed by so many other etf
SCHD outperformed VTV over 5 and 10 years and is very low cost. Just had bad luck this year. Many of us have a boatload in the S&P500 index in 401k's, so not having apple, Microsoft etc as top holdings (if at all) in SCHD is a good thing. Still have the bulk of my $500k portfolio in SCHD.
I’m taking the hybrid approach, VOO, SCHD as my foundation, with growth like MA, UNH, HD. And slow growth like O and PEP. I have a 20 year time horizon. But the best part is I still enjoy my life while I do this. Travel, and buy ONLY things I love. It’s the best combo, plus I love the small victories with receiving dividends/dividend growth/share price appreciation.
SCHD is an excellent portfolio addition, but relying solely on it for retirement may not be optimal. I retired at 62, grew my portfolio to $1.5 million in 10 years starting with 35,000 through the help of an investment advisor and dividends now supplement my retirement income. Invest wisely, build your nest egg, and don't sell the chicken that lays the egg!
Mind if I ask you recommend this particular professional you use their service? i have quite a lot of marketing problems
The decision on when to pick an Adviser is a very personal one. I take guidance from Amber Dawn Brummit to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
My needs are kind of unique and complex. I'll contact her nonetheless, and I hope I'm able to make something out of it.
I believe SCHD is the ultimate fund I have 100% portfolio in it and holding 1315 shares with drip for the next 25 years so am not worried kind of set it and forget it
Bought a loot of SCHD 4 months ago. Im in it for at least 5 years. Your updates are greatly appreciated. Thanks
Safety actually sounds pretty smart to me with the current state of things in the USA right now. I bought more SCHD shares today.
VOO is better diversified, while SCHD has more holdings concentration risk. i would think a blend of both based on one's personal situation is essential . in terms of profits, VOO has offered me more ROI as it is 22.25% up . i have $250k which i am looking to invest in covered call ETFS for dividend. Here for ideas...
So many recommendation in here, sounds like scam alert to me
Thanks for this informational video. I’ve been waiting to see a breakdown of the reconstitution. I’m sticking with SCHD. 530 shares and counting. Plan to be over 600 by the year’s end.
That’s huge! Good work
I’ve held this ETF for 6 years. Whatever their process is, it’s working. Consistent dividend growth. I bought about 200 shares during the downturn so I’m doing pretty darn good right now 😎 I was surprised to see MMM gone since it paid a decent dividend & was starting to recover.
Won’t lose sleep over it, SCHD hasn’t disappointed me yet. I also have PEY which is a great monthly dividend ETF (Tracks NASDAQ)
Thank you for getting this video out so quickly! There’s definitely been some panic after this announcement came out. As always, you help talk us off the ledge! 😊 Holding strong!!
🙌🙌📈
From a technology standpoint, Broadcom is recently hated by technology engineers and management due to it gutting of VMWare and other business practices. I go out of my way to not purchase network, server, or storage technology made by Broadcom's subsidiaries or if it's using of their chips. These budgets are in the millions and other are doing the same. I almost sold my SCHD due to their Broadcom holding. Glad to see it go.
Nothing to really comment on the restructuring of SCHD. But I did want to chime in that I just maxed out my 2023 and 2024 ROTH yesterday! VOO (30%), SCHD (33%), and QQQM (37%). 💰 I’ll have a pension and other revenue streams in retirement, so the ROTH is just play money. 👌
Good job, I’m trying to find stocks to invest im new to this. So far i invested in itot, and nvidia but I’ve been seeing a trend that people are investing similar to you
Kudos
Respect.
Hi Prof G! Thank you for this update! Ironically, I was just googling when this restructure was planned to happen….and here you are with it!
I don’t specifically track every company in the SCHD portfolio. But…I can give you some airport ramp talk- I fly in to St Paul MN quasi frequently. 3M bases out of there. The line guys were talking, I believe, last summer about how their flight hours were being reduced. I don’t remember specifically…they may have also mentioned some furloughing in the flight department; which is usually an indicator.
The flight department was completely closed down. They laid off all their pilots and sold their jets.
@dollarbill9073 wow....from dream job to no job :-(
You never let us down. Thanks for keeping us in the loop.
I am planning to invest $50 per week in SCHD, VOO and SMH.. is it good idea? or i need to increase my contribution?
Great video! Can you explain what drives the price of an etf, is it price appreciation of the underlying stocks or investors buying/sell shares?
Great question , often wondered about that , hopefully he can explain, thanks
Good morning. I hold a lot of SCHD and I've been adding to it. I've watched your analysis 2 or 3 times now. I understand the "why" of SCHD dropping bigger holdings like AVGO and MRK, but I'm skeptical of adding BMY and HSY, especially in the percentages listed. Also, this is one of the questions I have, is SCHD shoring up its positions in its other top 10 holdings? The swap outs don't add up, percentage-wise, unless that's what they're doing. If SCHD is shoring up its other top 10 holdings, it should reduce the angst some people are feeling.
Personally, I hold over 230 shares of MRK in other accounts so this does not concern me. Also, as you indicated, I have AVGO in my S&P 500 funds and in my growth funds. So, again, no concern. Finally, I've started spicing up my dividend sector with DGRO and AVGO is one of their top holdings.
Once again thanks for your analysis and insights. I'm staying the course. Cheers
I’m in love with your 3 fund strategy. I can’t help myself so put 5-10% into individual companies as well.
Do you think it makes sense to split the 3 funds between different accounts?
Currently I mainly have QQQ in my Roth, SCHD in my HSA, IYM/SPY in my 401k (my main job doesn’t have a spy choice and doesn’t allow us to control), and SPY in my taxable.
Thanks for this! Please continue to explain more things in the news as I'm not fully aware or understand it 👍
A lot of people seem to be panicking so this video makes me feel much better. I think it's just because people generally don't like change when it comes to their investments. Long term this ETF still looks like it's a great one to hold onto though.
Ya there is always unnecessary panic
Id love for the negative sentiment to knock it back into the high 60s, I didnt have a cash position last time and could only dca, now ive got a rolled over 401k to divey up. Sell! Sell!
@@Adam-ul2px@Adam-ul2px I dont think buying and selling SCHD has a very big impact on its price. It can only have up to 4% in a company and the price of SCHD is based on the collective price of all of the stocks in the ETF. The only way for the price to go into the 60s is if the weighted average of all of the stocks declines by 25% or so. This is generally why ETFs are more stable in general to invest into. That's very unlikely lol. Could happen in a crash of course.
Can you make a video comparing SCHD & DGRO Please ?
Amazing to see with 25% of my portfolio into SCHD seems like Charles knows what he is doing! ❤
Not sure why they got rid of Blackstone. Great dividends
Just bought my first shares of SCHD and QQQM today.
Lit 🔥
Great video, thank you. I am, to be honest, unhappy that they eliminated AVGO , so I may sell a few shares of SCHD and invest it in AVGO, but I will have to do it slowly using DCA.
Trust the process. I have SCHD, DGRW, and SPYI as my 3 ETF portfolio, plus a handful of other stocks from when I first started out to round out some other sectors like REIT's.
I will be retiring in June 2024 at 67 1/2 and will be taking my SS at 70.
So I am doing the following
Bucket1 3 years of withdrawals in a Money Market fund assuming no SS
This will protect me from a down market for 3 years until SS starts.
Once SS starts the amount of money needed to handle a down market will be less.
Bucket2 Enough in SCHD so I can live off of SS and dividends
Bucket3 the remainder split between VOO and SCHG
For Long term growth.
Every year I will adjust my buckets to meet my cash flow needs.
Please notice I am not using percentages for my buckets but instead using what my cash flow needs are.
Interesting and thanks for sharing. Individuals I follow would have more invested and not in cash, less than 2 yrs or lower. 2nd they would be uncomfortable with no bonds (or did I miss).
VOO and SPLG same thing, SCHG QQQ and QQQM same thing
In my case when I retire I will be waiting 2 1/2 years before I start taking my SS.
That is why I have 3 years in Money Market funds, to hold me over until I start getting SS.
Once I start getting my SS my bucket1 will still be 3 years of withdrawals.
But the amount I will need to withdrawal to cover my expenses will be very small so the amount of money in bucket1 will drop.
I will give an example
Assume I need $5,000 to live each month and my SS will be $3000 at age 70. (not my real numbers)
So before I start getting SS I will need $180,000 (5000*12*3) in bucket1
After I start getting my SS I will only need $72,000 (5000-3000*12*3) in bucket1
My bucket2 only needs to also generate $24,.000 in dividends each year that I will spend if the market is down for more then 3 years.
I also do not like bonds, instead of bonds I will have SCHD.
@@genglandoh Why wait on SS, it makes no sense to pull out $36,000 per year or $109,000 total. How many years of SS will you need to break even on this calculation. Plus the $109k can be in your funds creating more dividends or interest on some bonds.
Why wait to 70 to take my SS?
Good question.
I consider my SS as my most dependable income source, so I want to maximize it.
It is guaranteed, has an inflation adjustment every year and grows 8% each of the 3 years until I am 70.
It is like insurance it protects me from
1. A long bear market
2. My living past 90
3. My wife in the case I die first.
So for me and my wife waiting to 70 makes sense.
Splitting money to this third of 3 fund portfolio between SCHD and DGRO so happy whatever changes were made.
I love this new SCHD more. It was a great idea to pull out AVGO due to low div yield. I already have AVGO in my VOO, SCHG and SOXQ. I will buy more SCHD now. Thanks for all of your research Professor.
You’re welcome!
I’m actually investing into both SCHD and DGRO in my IRA so I’m glad you mentioned them too
me too
FDA just approved Bristol Myers squib’s Car T cell treatment. That’s a good add.
I was roughly on track to have VOO (+FXAIX in my 401K) and then lots of SCHD. Then I thought, duhhh, I have some IRA accounts and also a standard brokerage account. I'm trying to put the SCHD over to the IRAs so I don't pay income tax on the higher divs now. I'll keep VOO in the brokerage. It gets dividends too, but a lot less.
Glad to see Tyson Foods out. AVGO, ehh, but I still have exposure to AVGO through SCHG (albeit not as much). I do wonder how much if any that will impact the overlap. Currently (formerly) 3%.
Very informative video. It reaffirms that diversity isn't just about overlap in holdings, but that funds have different strategies. As you mentioned, AVGO was let go from SCHD, but it's still in VOO as its index follows different rules.
Yes exactly!
Thanks for the video! Can you do a video on leveraged ETFs such as QLD, USD, SOXL. Pros and cons and your recommendations
hey prof G appreciate your informative videos. it helped me formulate my IRA portfolio. i was wondering if youve ever looked into NOBL ETF. I know it has a high expense ration but do you have any opinions on this fund?
I own a couple individual stocks but my portfolio is primarily VOO, SCHD, and SCHG. I am playing the long game. Hoping to build up to 100k soon! My portfolio is only 13k so far tho
Rome wasn’t built in a day. It takes time.
@@Kevinw4040 very true. Thanks for the words of encouragement!
That's a good combination! However, I feel like SCHG is quite similar to QQQ.
My daughter just graduated her university & as a gift, I set her up a nice portfolio w/drip: VT, DIVO, SPLG, JEPQ, JEPI. I picked DIVO over SCHD only because it preformed closely the same, but at half the price per share. Peace.
Looking at the two ETFs, DIVO has a higher P/E ratio and also a higher expense ratio than SCHD. I believe SCHD provides a better balance with growth for capital gains and also dividend earnings for passive income. Not saying you’re wrong to purchase DIVO, just sharing my opinion. What do you think? Aside from similarity in performance, why did you choose DIVO over SCHD?
Is this in a tax deferred account? If not, she will have additional taxes to pay since some of those pay out as ordinary income.
Buying her stocks is a wonderful thing. I hope she keeps adding to her account.
I'm excited about bmy and hershy
You have become my favorite investment mentor overnight. Clear explanations, and one can tell that you know what you're talking about. Simple yes or no question: my 3 ETF portfolio is s&p 500, Nasdaq 100 and a well-established semiconductor ETF. Would you call that too risky and not diversified enough?
Thank you so much! I’d say you do have a good amount of diversification but does push a bit more risky (but still way less risky than any individual stocks!)
@@NolanGouveia thank you. I appreciate it.
Hey Prof. Dumb question. Why doesnt SCHD hold top dividend stocks like Coke or JNJ etc?
You'd listed 7 top dividend stocks on one of your shorts but I dont find them in SCHD.
Whats the rationale?
As for AVGO - why wouldn't SCHD consider 'yield on cost' reflecting the share price increase (I bought AVGO last year and my yield on cost = 3.08%)?
Because Yield on Cost is backwards looking - it tells you how you did, not relevant for how things are right now, and it doesn't predict the future.
...what do you think about CGDV as a compliment to schd...actively managed..high exp. ratio...??
When I pick any ETF, I consider it that I'm actually paying that expense fee for their methodology and formula for picking and balancing their investments. I like SCHD's formula, and I'm sticking with them. Having said that, I have more than one dividend ETF within the dividend sector of my overall portfolio.
It's my core holding. I have enough SCHD for NOW, so I'm holding and putting new funds elsewhere. There does seem to be a flight to value starting. If that picks up, then the move up could be high in 2024.
I own BMY out right. Not super excited about the extra exposure, but if SCHD added it I kinda feel validated that I bought at a lower price.
Same here
please comment on all of the bank and financial sector additions
Gotta love SCHD
I only have 3 holdings and all 3 are ETF's SCHD-VYM & DGRO
Lots of cash flow!
@NolanGouveia you know it 🤙🏽 love the videos thanks for the time you put in these.
I was very surprised they pulled AVGO. CINF was a nice addition; however, there are some selections that lack luster like COLB. I shaved some shares off my count and added to DGRO and SPYI. I will hold my remaining SCHD shares and DRIP them. I hold shares of AVGO and can tolerate the cut to avoid concentration risk. Any portfolio can afford some lower risk holdings. Thanks for presenting this today.
Another fund that is very similar to dgro and schd hybrid is is fdvv. The expense ratio is 0.15 like QQQM. Well that's my 2 cents. Great video by the way. 🎉
My favorite addition is Hersheys also at a bottom and it should be prime to go back up.
I am currently owning FXAIX on my ROTH IRA, after seeing your videos I am not sure if I should buy SCHD as well.
Hypothetical: Family puts 10k weighted in thirds into Prof Gs 3-ETF picks. Family plans to reinvest 10-15k per year (amount estimated to lower tax exposure) from a high-fee/low-to-moderate yield deferred comp 457 plan from a previous job in order to gain more control(and better yield) over the funds in the 457. (457 has no penalty for withdrawal, but funds are considered taxable income upon withdrawal from 457.) Is putting the yearly reinvestment directly into the same ETFs smart, or should the family look at spreading it out into other quality ETFs in the same categories as the initial 3?
Currently holding SCHD and SCHG in my ROTH IRA. Yes, maybe I should think about adding VOO.
There's a lot of overlap between those three if you add VOO. 60% of SCHG's holdings is in VOO and about 50% of SCHDs holdings are in VOO. Just making you aware of the overlap that would exist if you do.
@@ethanonan7709 Thank you! After further evaluation I came to realize that. I’m going to stick with the two.
Broadcom is a surprise but your explanation makes sense. I personally have it as an individual stock and sprinkled in my growth ETF part of my portfolio.
Solid
I own 200 shares of CF outright. Hopefully SCHD adding CF will help the stock price and I'm in a win-win. Just bought another 13 shares today of SCHD.
Awesome video! I’m a long time fan of SCHD lol… I’ll keep DCA this like I have been doing but actually with a higher frequency (weekly now) and consistently.
That’s what I like to hear!
Professor G I’m a low income investor for the long term, I have a portion of my portfolio in VTI but I just found SCHX which is cheaper, covers the of what VTI has, and also have great return and growth numbers. Now I wonder, me as a low income investor, what should I do? Should I go for SCHX which it at $60+ or VTI which is at $200+?
Hello. I was wondering where people are investing SCHD. Are you buying it in a brokerage acct, a roth ira or a traditional ira. What would be the best acct for it? Thanks!
I have it in all of my investing accounts! ROTH would be #1
Hi Prof G. I have been following your videos and they have helped me understand the value of balanced etf investing. Question: A lot of videos say SCHD is better than VYM however VYM has outperformed SCHD this year and I am reluctant to let is go in my 3 ETF basket strategy. Here is the mix: 25% VOO, 25% SCHD, 25% VYM, 25% MGK. Your thoughts on this balance and if I should move money out of VYM and move it to SCHD and balance each out to 33.3%. Thanks so much for your videos!
Your portfolio looks good the way it is if you’d like! You’ll just likely have more upside if you switch to 33% in each
I don't know about dropping AVGO. At least I own it in my own portfolio.
I see they dumped Williams Sonoma. Funny because the WS storefront at my local mall just closed down. Wonder if schd knows something we don’t lol?
One of SCHD dividend criteria is dividend yield. The lowest yield in the new SCHD portfolio is DKS at 2.07%. After huge price appreciation, WSM yield : 1.58% and AVGO 1.7%. Both do not make the dividend yield threshold. MRK yield is 2.54% but it was probably removed because it did not meet other SCHD criteria
Professor, where do you also get Broadcom on your portfolio? ETF?
S&P 500 and growth ETFs
I crossed 250 shares with the most recent payout.
I do wonder why they took out AVGO. I invest in it separately and it’s a banger in every aspect.
Can you do a video on SPDR Portfolio S&P Sector Neutral Dividend ETF (spdg)? It isn't really talked about
SCHD is a contrarian play against tech it would seem. If the index filters work, as they should, this years holdings should work. My concern are regional banks. If Powell keeps rates high, will the volatility of the funds regional bank holdings cause issues?
Thanks for the update. I'm looooooong on SCHD. Looking forward to this month's dividend payout!
Same!
I would have appreciated a link to my Seeking Alpha article in the description, which you used at the 1:20 and passed off as your own views.
👏🏼👏🏼Great video! I appreciate the level of detail you provide in a simplified and easy to understand way. You have made my investing life easier!!! Thank you.
IS there an equivalent ETF on the Toronto Stock Exchange for Canadian?
I went overboard and put SCHD, VYM, VIG, and DGRO inside my portfolio
Bro, I switched my portfolio so many times. Best thing to do is sp500, growth and add dividend, semiconductor cyber security or healthcare .
Very good point
Then you did the right thing
While not a dividend ETF, I also have DIA for reliable albeit small monthly dividends
@@bossballheaddawg2588 I did similar and just added SMH to mine. I can’t stomach 900$ for Nvda but 200$ for the etf is more palatable.
I think the last couple recons have brought SCHD down in performance and dividend growth. And for the record, SCHD does NOT stick to its formula screening. They adjust it to include stocks that have cut their dividend in past 5 years or have lousy sales growth. Like Ford for example. Look at how many Financial stocks are now in this - 25+. And how did Ford stay included?? Their profits are zero and forecast negative growth with high debt. I sold 20% of my SCHD stock after last reconstitution and I'm selling more SCHD now and buying DGRO and VOO.
Professor G, can you make a video talking about JEPI and JEPQ advantages and disadvantages? I've been seeing a lot of people speak about those two ETFs with high dividend yields, but wanted to get your opinion about their reliability. Thanks.
I’m excited about the changes, I’m investing in this ETF mainly for the dividend and hopefully it grows the Div really nice this year!!!
📈🙌
Nice video ! But I have to admit that when you look at the removed companies …you wonder why !!!
Abbvie was a surprise to me, as were some others. Still, SCHD's system has been working!
Thank you professor for the explanation, you have a way of breaking down the topic to make it understandable. You must be a great prof.
Thank you sir!
I like that HSY was added, bummed that MRK, ADP and WSM were removed
Love your perspective Professor G! I'm sticking with the 3 fund portfolio you recommended all the way! swppx, schg, schd!!
Only reason I would sell SCHD is if they completely overhauled the tried and true formula to something I didn't agree with. Yeah it sucks to lose Broadcom but it's all by design. If you're still in doubt, compare SCHD to BND. Trust the process.
$.611 is the dividend payout for first quarter 2024. To be paid on 03/25/24.
Removed MMM and added HSY sounds awesome. Wish they would've kept AVGO. I'm still going to DCA SCHD.
With the price of chocolate skyrocketing the past 8 months, we’ll have to see if it adds to HSY bottom line with bigger sales or not.
To have Verizon over Broadcom I do not understand?
My understanding is during a economic downturn dividend stock generally perform a little better on average is that correct?
Usually typical yes
Well done. Stick to the 3-fund portfolio or whatever your long-term strategy may be. Index funds doing index fund things is nothing to be upset about.
Thanks for the update! Me? VTI, QQQM, SCHD 🎉
I'm doing these 3 as well. Buying every Wednesday.
SCHD is currently my largest holding at 7.2%
Same! Doing 60%QQQM, 30% VTI , and 10%SCHD (I'm 25) will slowly make SCHD a bigger portion as I grow older.
@@Christian_Villanuevajust do the 33percent split my guy
@@matthewdiduro7815 not tax efficient
I'm in the same. Dividend, foundation, growth.
I believe that SCHD sees the stock market reset coming in 2024 and they are preparing for it. I'm all in for SCHD. To me it's time to go DEFENSIVE.
I’m with you!
Thanks again. It will be interesting to watch this etf. I’m in heavy on SCHD. Great video
They followed their process and I’m good with it. AVGO’s dividend yield had dropped significantly.
Very true
I actually like the consistency to their cause
Good stuff right here. Any possibility to do a comparison between SCHD and USA or like fund? I read a Seeking Alpha article talking about how awesome USA is and how it’s outperformed SCHD. The research that I did showed that USA had a substantially better dividend yield but its appreciation was terrible by comparison. Personally I did not see the value of USA. I am curious to know your thoughts.
Thanks for the reassuring video as i am heavy in SCHD. I believe in the 3 etfs that you have shown us and thats how i have allocated.
Nice me too!
I think SCHD, DIVB & SCHG is a good a combo. I think DIVB > DGRO..🤔
Thanks a lot for explaining - just stick to the rule and three-fund portfolio and keep it going
Very bummed that Broadcom was removed.
Shoulda been Ford, honestly
Nothing stopping you from buying AVGO.
I’m gonna cut my Schd percentage and add it to DGRO.
@@thewilder-side2990a lot of people saying this after the reconstitution
If you want AVGO, buy QQQ or SMH. If you want diversification, get SCHD since SCHD overlaps SPY only by 10%
I inhered 256 shares of Merck in 2020; trimmed to 185 shares. I inherited 12 shares of Bristol Myers Squibb in 2020; increased to 65 shares. Sort of glad SCHD swapped out Merck for Bristol Myers Squibb.
I have 321 shares of MRK. Never sell or trim it. I want to let my winners run. My yield on cost for MRK is 5.3%. I use MRK dividend to buy BMY
@@kurniawanms2 I agree Merck is a good company but when I inherited this Investment Portfolio from my brother's estate in 2020 3 stocks made up 25% of the portfolio Merck being one of them. Along with PepsiCo Cincinnati Hometown favorite Procter & Gamble I trimmed all of them
Miss you Broadcom. Luckily like you said i am well covered in my new 40 ETF portfolio
40 ETFs is crazy
@@diegocontreras3173 I have already upgraded my portfolio even further. Is there a downside to owning 100 ETFs vs a few? Mine is in a Roth so i don't have to worry aboiut taxes.
Thanks for the video Prof G. I will stick with schd for diversification since I have other growth and foundation etfs 😊
Great move!
SO WHAT IS THE FINAL MAKEUP OF SCHD FOR 2024 GOING FORWARD
A little late but calling on the divy experts. I have 1,359 shares of SCHD in a taxable account (106K) with a 71.56 average. Since I live in Michigan and they tax dividends, how would you navigate this oversight and get the shares into a tax advantaged account intended to live on dividends for life? I'm 12 years from retirement (will be 62 1/2), and can contribute 16K per year into Roth IRAs. Note: I'm thinking selling each year and funding the Roths over time considering my goal. Thoughts?
Great content as usual! Following your 3 etf portfolio strategy, I’ve started weekly investment in voo, schd, and vug
Good stuff!
I ivest in individual "fun companies" for the growth, and SCHD for the backbone. It was always supposed to be boring. Boring investments are safe investments.
Agree