Thank you for the comment. I think you’ll be happy, long-term, with that mix! If it crashes down a bit, remember, keep buying. Never sell (or at least not until many years later).
Thanks for the feedback Aaron! I think you have done an amazing job! I'm often torn between VGT and QQQM. I have rolled with VGT so far, but wouldn't be shocked if I have both long-term. SCHD is a no brainer for me. It's not that I think it will outperform all of the other dividend ETFs every year. It certainly didn't in 2023. But it's an AMAZING counter-holding to VGT when the market is dropping.
Have you considered XLK. Very similar fund to VGT, but has outperformed it significantly. It’s made up of the Tech companies from the S&P 500, so their companies that are a little more proven than some of the smaller ones that come with VGT. I like a 50/50 QQQm and XLK combo but my goal is maximum growth and I’m not concerned about the dividend income this stage of my life in my mid 30s.
Thanks for the comment! I do love XLK & QQQM. Awesome mix you have there! XLK has ran away with the crown over the past 1-3-5-10 years for sure. Zooming out, it and VGT are within 1% on total returns (1,086 to 1,087%) over the past 20 years. Over 80% fund overlap with VGT and XLK. I don’t think you can go wrong either way. Stay the course and you’ll likely be a happy camper in retirement!
I use FTEC instead of VGT ( they are basically the same). The thing is, I saw way too much overlap between VOO and QQQM and FTEC and QQQM. But VOO and FTEC is only 30% overlap. So as much as I didn't want to give up my QQQM, I did. Sold it all for more VOO and more FTEC. But I'm with you, I love QQQM.
@@roymoore7743 thanks for the comment Roy. I’m with you, FTEC is awesome! The overlap is a little lower with VOO because FTEC is 100% tech. I’m a tech bull, so I like that. But I do think the overlap of QQQM and VOO is more healthy than a typical 46% of two ETFs because they both capture a market real time based on market cap. Companies will come and go, so they will both properly update for the new trends over time. But it does come with overlap. The 100% tech sector of VGT or FTEC is probably technically more dangerous over the years. But I love tech looking forward!
I realigned my Roth this year. I now have 40% in VOO, 30% in SCHD, and 30% in QQQM. In my brokerage account, my goal this year is to invest $50 a day into VGT. It isn't much but I think it will really help my portfolio. I just recently started option trading and any gains in that will likely go into SCHD. Really appreciate your video!
Thank you for watching & commenting. You have a great set up! If you are able to invest $50 per day you will very likely be a happy camper down the road!
I believe in this 50/50 growth and SCHD mix. I am going to do this in my Roth IRA that I am starting. I already have 150k in TSP C fund (basically VOO). SCHD makes more sense than bonds and international. I agree and glad I discovered this strategy.
Hey Tony. Thank you for the feedback. I'm glad you like the strategy and are giving it a go. VOO is a great holding to have as a cornerstone as well. My 3 favorite ETFs (: I wish you well with the Roth growth over the years. I think it will do great.
$10K invested in VGT from 2013 became $89,770 today with a 20% annual increase. $10K invested in SCHD from 2013 became $42,158 today with a 12.7% annual increase. I would put all my bucks in VGT and “let it ride”.
Thanks for watching and commenting. VGT has been a beast, but it has also been a bull market over that time. SCHD is a nice low-tech counterpart to assure your portfolio beats VOO yearly for when VGT is beat up. However, if you’re very young, I think riding VGT, with a rule you will not sell no matter what, isn’t the worst idea ever (: I don’t see tech dying off, at least in the near future.
Watched this video again. That 50/50 mix is mind blowing at the end. I wish they taught this in high school I’d be retired by now. Better late than never I guess.
Understood. Your DGRW video was great too. SCHD has a low fund overlap with VOO, but most of the well-known “dividend” ETFs such as VIG, DGRO, VYM, etc do not by comparison. I was simply surprised that after substituting DGRW into Portfolio Visualizer for SCHD and pairing it with 50% VGT, it provided a higher 10 year return than SCHD, and every other dividend fund I could think of, including NOBL, HDV, DVY, FDVV, and DTD as well. As you suggested if it were to be integrated, the VGT and SCHD %’s can simply be reduced, which worked well too when backtesting. Just an observation. Thanks for the great content!
Anytime, thanks for the feedback. If I could only pick one ETF to have, DGRW or SCHD, I would easily go with DGRW. It’s the upside / downside combo of VGT / SCHD that makes it so special. Basically, SCHD + VGT is ‘similar’ to 100% DGRW. But the VGT/SCHD is better on total returns (because of VGT), dividend growth rate (because of SCHD) and dividend yield (because of SCHD). SCHD is cash flow and downside protection for an aggressive growth. But in a vacuum, DGRW or SCHD, pick one and one only, I would go DGRW.
@@hanwin651 If you’re asking me (all the comments are strung together on my phone), I just released a video with this. Thanks for watching and commenting!
Thank you for watching & commenting. That is a fantastic mix for a portfolio! Get's a solid 50% in a cornerstone that will reflect the market, 35% in my favorite growth index (same is VGT), and 15% dividends! I would be FLOORED if that didn't work after dollar cost averaging in for 10+ years.
Hi Jeff, the majority of my investments are in VGT and Semiconductor stocks and ETFs. Watching your videos I have decided to DCA my new money into SCHD and DGRO and trim some stocks once they hit price targets and take profits. The reason I own DGRO besides the The growth and dividend play is they own specific companies like Visa, Walmart and a few others that I would like to own. I like the way you approach the market. Investors today have great access to good information and low cost investments. I am 55 and have seen how mutual fund fees and advisor fees negatively impact the market.
Hey Chris! Thank you for sharing your situation and a *huge* thank you for becoming a channel member. I see that shiny badge. It is much appreciated. I think it is a smart move to mix in SCHD and DGRO to your current portfolio. Truth be told, I was heavy in VGT for a few years myself. The ups are just too juicy to ignore, and the downs made me happy because I would buy more. Maybe something is wrong with me, haha. But eventually I decided to find a nice balance and never look back. I think it will help us do better in all markets & it will also help us sleep like a baby (:
LoL, thanks Oldrin. I'm not really sure what is going through my head by the end of the video. I usually will do something weird just because at that point (:
Great stuff - I tried to tweak my own mix (SCHD, VIG, QQQM, O, VOO) to beat this allocation and I couldn't do it. This 50/50 mix is elite. I'm considering moving my own portfolio in this direction now
Thank you for watching and commenting! Your mix is full of high quality holdings. You could always sprinkle in an allocation of VGT and adjust the portfolio slightly from there. You'll be a happy camper if you dollar cost average into your setup and hold for many years.
This is a compelling case. I actually rebalanced my portfolio after watching from SCHG. Then I went down the rabbit hole and did a 50/50 pairing of XLK and SCHD that seemed to have a hair better performance than this combo. Can’t really go wrong with either!
Thank you for watching and commenting. I think you made a great move! SCHG is solid, and I plan to make a video to discuss it soon. But XLK is amazing. And more than that, it has VERY little overlap with SCHD. That work very well together! Great move. I think you’ll be happy long-term!
I just started my Roth IRA and I saw your incredible portfolio. I'm now thinking 50% SCHD & 50% VGT or QQQM for growth and dividends because of this video. My 401k contributions will just focus on the sp500 with matching. Do you think that's a wise choice for the Roth IRA? Thank you for the videos and I'm looking forward to more videos!
Hey Tommy, thanks for watching and commenting. I think that is a fantastic way to go! Getting that S&P 500 base holding from 401k is exactly what I’ve done for years. As far as VGT or QQQM, I think either is great. You could do both (just keep the overall growth section the same) and be fine.
Thanks Jeff, I just found your channel the other night and I definitely enjoy the way you make you presentations. I have recently retired. I have a 401k to rollover. I am thinking a 50% SCHD, 30% VGT, 20% JEPI, 10% Money Market? The other question with it being a rollover do you still dollar cost average in or invest it in a lump sump? Thanks again
Hey Fred, thanks for the feedback and for the question. I personally fully invest my rolled over 401ks right away. I figured I went from being fully invested for years right before the rollover, so may as well get back in. Lump sum investing is 'usually' better than dollar cost averaging in for that situation. This makes sense because the market 'generally goes up' over the years. Of course, it comes with some risks of the market crashing right after. If you're not comfortable getting it right back in the market, you can always invest a big chunk to start, and then aggressively dollar cost average the rest in each week over a fairly short timeframe. You'll want time in the market, long-term, over timing the market.
The past 10 year outperformance of this 50/50 portfolio can be almost fully attributed to VGT having 40% of funds invested in apple and Microsoft which have outperformed (20% of total 50/50 portfolio vs around 10% for voo)
Thanks for watching and for the comment. They have been monsters to be sure. I still wouldn't choose to own them directly, though, because then you have to time things right a couple times. Market cap weighted ETFs make the process smoother with consistent updates based on a changing market without us having to make decisions. For example, if one of the two fell, it would naturally be weighted down (just like the S&P 500 or Nasdaq-100 indexes). Past performance is great and all, but wouldn't want to be bound to specific tech companies.
I don't try to out think the market and try to outperform the market most of time in a long duration period you will lose that battle. It's a boring strategy and does not create for fun UA-cam videos but in reality you will more than likely be better off when you retire. I am long VOO about 90% of my portfolio. Good luck all I hope everyone makes money and I applaud everyone trying to plan for a better future for them and their heirs.
Nice. Either one is fine, but I think Vanguard is the best personally. They are 98%+ the same. Both follow the same index, the S&P 500. So neither will ever be cheaper (assuming you mean from a value perspective, PE ratio). The 0.01% expense ratio difference is negligible. For example, in the past 10 years, the total return (including expense ratio) are: VOO: 224.61% SPLG: 222.62% This is due to more timing and randomness of following the index. I'll always roll Vanguard for the passively managed indexes if they are available. Long-time quality name in the space, reliable, and crazy high AUM for stability.
Thank you very much much for sharing and may I ask you that is it a good time to buy the vgt now with the price expensive and I really like this one or should I I wait for they correction the price
Thanks for the positive feedback & for the question. I'm not a believer in timing the market, however, I understand that sometimes the market is high or low, in general. The way I approach this situation is to start dollar cost averaging in at all times. Then, make sure to stick to your target allocations moving forward. This will automatically buy the dip forever without timing the market. For example, if you had $500 to invest each month, and you wanted a 50/50 mix of SCHD and VGT (or any two ETFs), you would buy $250 of each the first time. If VGT crashed, and SCHD performed well, the next time you put in your $500 you would buy more VGT (to get it back up to its 50% target allocation). M1 Finance is an awesome platform that does this perfectly for you. You just create your allocations and feed it money. It will automatically buy the dips to keep you at your target allocations. I have a referral link below if you want to open an account and get free $. You can do the same process on any online broker, manually. It is what I do on E*Trade (I use ETRADE and M1 Finance) to keep my SCHD and VGT in balance. The last couple years I've been buying nothing but SCHD (to get it back to 50%).
Thanks for watching and commenting! Very nice! It is a great combo long-term. Market been a little shaky early this year, but that is the beauty of dollar cost averaging in.
@@DAVE-THA-PLUMBER5-10% cash in a couple 1 yr CD's 6 months apart getting 5%, almost like an emergency fund or cash in a money market getting like 5.3%. isn't necessarily 'trash.' It's kinda peace of mind and sleeping well money.
@Adrian0-tx9nb Thanks for the question Adrian. This is a tough one for me, because I'm a huge believer in the Nasdaq-100 index. So I love QQQ (well, QQQM for the same thing with a little lower expense ratio). I slightly prefer VGT for 3 reasons: 1) SCHD is my dividend ETF, so I'm comfortable having a tech-only growth ETF with the great counter-balance of SCHD. 2) I am a huge believer in tech, in general, both historically and more important looking forward. 3) It has outperformed QQQ over the years. Total returns: VGT: 3Y is 34.88%, 5Y is 189.22%, 10Y 479.78% QQQ: 3Y is 29.67%, 5Y is 159.74%, 10Y is 396.38%. Granted, QQQ did take the win in 2023 at 55.91% to VGTs 54.14%. They are both amazing, and even a mix of both for a growth section of a portfolio would be great. I slightly prefer VGT because I'm a huge tech guy, and I have the least tech based dividend ETF. If I rolled with DGRO, DGRW, or VIG, I may use QQQM as my growth ETF. I look at the big picture. I have an easier time suggesting QQQM to new investors because I feel it is more balanced overall than VGT. I think both are great long-term with dollar cost averaging in.
Thanks for the shared insight - very informative! One question though If you'd have to start investing with, say $10,000, would you bolus-invest or spread your entra over a few months?
Thanks for watching and for the question. I personally would lump sum invest (all at once) the $10,000. This is assuming I am still working and dollar cost averaging in more money (beyond the $10,000) each month.
Hey Ivan. Thank you for watching and for the comment. I think that's a great idea. 15 years gives you plenty of time to ride out the ups and downs of the market. When you dollar cost average more money into the Roth IRA, you will be able to 'buy the comparative dip' by evening up the ETFs again.
This is so true and so obvious! I recently moved a my savings into these two plus $SMH I also played $SMH Jan 26’ calls at $400 strike. The asymmetrical return is massive if it just fractionally performs like it has been recently, for the next 18 months. Let’s go 🔥!!!
Man Pete, nice job with the SMH returns. It's funny, because I KNOW SMH is awesome, and it has been awesome for over a decade. I haven't been able to get myself to buy it because it is 25 semi-conductor companies only. I know VGT is tech heavy and dangerous, but I like getting a variety within the tech sector. Jokes on me, though, because SMH has been amazing (:
Good stuff Jeff - thanks. I had to roll a pension from a previous company to an IRA a few years back. It’s in active managed fund but I’ve been thinking about moving it to an ETF. Would you recommend a VGT/SCHD combo for a pretax fund?
Hey Mark, very nice! I think VGT / SCHD is a great mix in any account type. You could add a little VTI or VOO as well to get 'broad coverage of the market'. I like to have about a third of each. This will also depend on a person's goals and situation, too.
The thing about VGT is that almost half the ETF is in 3 stocks. It's perhaps only a mild exaggeration to say that if I wanted to be that concentrated, I could just skip the expense ratio and just hold those stocks instead of the ETF. QQQM is perhaps a more diversified pairing to SCHD if I wanted tech growth. Or, perhaps SCHD/SCHG if we'd prefer to diversity our growth further.
If FTEC is cheaper how come we don’t do 50% of that and the other 50% SCHD? Also why is ftec cheaper in the first place? And would you consider adding 25% VXUS 25% SCHD and 50% VGT to include international in the mix for even more diversification ? To give an even bigger parachute if VGT drops heavily
Thanks for the questions. FTEC is a solid replacement for VGT. They track the same index. I like Vanguard personally. VXUS could make a run in the future. I’m always watching it. So far, it would have cost me 3-4 hundred thousand for a 25% allocation. I take the wait and see approach with it. I’ll likely be a little late to the party, and I’m okay with that.
Hi Jeff, I watched your "Modern 3 Fund Portfolio That Beats The Market Every Year" and compared it with this video and in the Portfolio Income section, how come the 3 Fund Portfolio has a higher income from the chart than the this video? I know that in the 3 Fund Portfolio, there's just VOO added but it shouldn't be that far off right? I'm going to building a portfolio with 20 years out and trying to see if the 3 Fund Portfolio is better than the SCHD and VGT portfolio that will build the most income in 20 years. Or just stick with SCHD and VGT that will give the most income? Thanks in advance.
Thank you for watching and for this comment. It is a great question. Having 34% in VOO creates quite a drag on cash-flow compared to VGT + SCHD. VOO has historically been a lower yield & lower dividend growth rate compared to the mix. Compounded over time, that 'little difference' makes a 'huge difference' on the income stream. However, I still love VOO because it has been rock solid for over 100 years. If 90% of the 'experts' fall short of it over long periods of time, I consider it a great cornerstone to add to a portfolio. So far in 2024 VOO is outperforming VGT + SCHD on total return. I love all 3 holdings, but VOO will definitely drag income streams compared to the mix of only 2.
Thanks Scott! Much appreciated. 50% QQQM / 50% VFIAX is amazing, but doesn’t have the downside protection without a quality dividend ETF. Much like VGT / VOO, it will beat VGT / SCHD in the last 10 years. However, it must be held in the hard times (don’t sell low) or major compounded gains will be erased. When it does crash, buy buy buy! (: For a young person, very solid set up. It’s 2/3rds of my modern portfolio (QQQM is my recommended growth if VGT is too much tech, and VFIAX = VOO). I love that mix!
I build on my Roth SPLG(98% V00), SCHD+DGRO, and for growth SOXQ(88% SOXX), a small portion IBIT. I am 42 y/o. What ETF can or could be changed, and what % in the portfolio should be. Also want to make another portfolio or copy for my HSA account.
Hey Russell. Thanks for the comment and the question. I like your mix a lot. You have the dividend and cornerstone (SPLG) set. Your growth of SOXQ and IBIT is great, but VERY 'growth-like' lol. I'm not saying you need to make a change at all, but I may sprinkle in SCHG or QQQM to the growth just to get a quality 'multi-sector' growth position. If you stay the course, you'll likely be happy long-term. SOXQ will give you a heck of a ride, though. Don't panic sell when things hit the fan. Keep dollar cost averaging in.
Nice analysis BUT to be more compelling you should also show how the 50-50 portfolio performs against VGT alone. Total returns may well be higher over the 10 year span with just VGT but you could show larger losses too in down years (i.e., higher volatility and risk).
Thank you for watching and for the feedback. It would be interesting to compare growth to dividend ETFs over the past 10 years. It would definitely show it's been a crazy bull market (the meh growth CRUSH the best dividend ETFs by far). Seeing the ups and downs would be helpful though (to show how SCHD stabilizes VGT in bad years).
Very interesting, wife and are 37 currently, portfolio is about 75% S&P 500 in 401K, reallocating remaining 25% funds to Roth IRA via backdoor conversion and taxable brokerage, then we have on going Roth IRA max and $3500 per month to put into taxable brokerage. I was going to be going SMHX + AVUV between Taxable Brokerage and Roth IRA. Anyone care to offer compelling argument for VGT + SCHD instead?
I think you and your wife have a very nice strategy. I don't have any compelling arguments against what you are doing. Staying the course with that mix should do very well over many years / decades.
@@JeffTeeples thanks, my only thought potentially was on saving a bit on LTCG from selling off SMHX towards retirement vs just keeping VGT for the long haul, as I don't feel like SMHX will be an inevitable 30 year+ long term stability play, but 10-15 years, don't see how it won't be very solid growth.
Thanks for sharing. That will do so well for you over the years with a consistent dollar cost averaging in strategy. Any plans to mix in a quality dividend ETF or two when you get closer to retirement?
@@JeffTeeples Yes sir! Thanks for your response. I have been doing dollar cost averaging every month since COVID May 2020. I’m still doing research and will find a dividend etf to add to my portfolio.
That’s awesome! And it is no rush at all if you still have many years until you retire. Take your time researching. The wealthiest investors are the ones that research the most and make the least amount of moves.
Thank you for watching and for the great question. I have a custodial account in E*Trade that works well for me (and my Nephew). It was easy to set up and get funded for him. I haven't tried it in M1 Finance. The other online broker that people seem to love is Fidelity. I'm not a fan of the messy look of Fidelity, personally, but it is a platform that has everything available. It is a great broker if you only want one place to do everything.
I started a similar 3 ETF experiment in my IRA 14 months ago with 33:33:33%, using VOO: FTEC: SCHD. With no rebalancing, FTEC is sitting at +51%, VOO @ +21.5% and SCHD only +1.7%. VGT ~FTEC in performance and a little lower ER. Could have skipped VOO and made it a 2 fund portfolio. +25% overall.
Very nice Karl! It’s amazing how much better growth ETFs have performed during this crazy bull run. It’s so easy to get a portfolio out of balance over many years. I love VGT, FTEC, or XLK for 100% tech coverage.
Love the Content! Was curious on your opinion of adding a bit of Real Estate to this portfolio as currently there is none. If I wanted to add say a USRT at a 10% weighting, would you deduct an even 5% from each SCHD and VGT? Thanks for the continuous educational Videos 🙏🏻
Hey Ted, I appreciate the kind words about the channel. I think adding real estate, and / or international exposure to a portfolio is a fine idea. I would probably replace SCHD with the real estate. They are 'more like each other'. Granted, the mix will be age dependent in general. Someone retired or close to might already have 80% SCHD, or vise versa for someone that is 21 years old. But I think real estate fits into the portfolio to replace a dividend ETF more than a growth ETF. International would probably replace a touch of both (or VGT). There is not a perfect allocation for a one size fits all plan. It will depend on your age, wealth, work situation, risk tolerance, and goals. But having growth ETFs, Dividend ETFs, cornerstone ETFs (VOO or VTI), International ETFs, and or real estate isn't a bad idea for overall portfolio balance. I personally do not have real estate, and I do this from a 50 to 100 year perspective. Sometimes it looks bad, or good, real time depending on the current market situation. I am always watching international ETFs. Not having one has made me 6 figures of opportunity cost in my portfolio, however, it could change any time, and I will likely be late to the party. Much like Jack Bogle, I'm okay with 'that' risk. I will never stubbornly say NEVER, because I don't think that is smart.
Would vgt and schd be ok in a taxable account aswell as a Roth IRA? To enjoy some of the benefits currently. I know there would be tax implications but curious if they are enough to be a deterrent in going this route?
Hey Logan, thanks for the question. You bet. They are both great holdings for a taxable account. The dividends will be taxed as 'qualified dividends' which means you will pay less taxes on them, and they do NOT add to your taxable income (they don't play into your Federal tax rate at all, they are considered after all the 'normal tax stuff' each year).
Hey Brady. I can't go back any further with SCHD specifically. It hasn't been around long enough. But I do have some videos coming in the near future that will go way further back to look more into asset classes. For example, large cap US vs small cap US vs international stocks. I'll continue the SCHD+VGT back tests for many years to come as we accumulate more data.
Great video! Thank you so much. Would you say SCHD is better than SCHG? It seems like SCHG recently performs better. Just wondering your thoughts. Thank you.
Hey Jane. I think SCHG and SCHD are both great. They are on completely different sides of the growth / value equation. SCHG should be compared to other growth funds like QQQM, VUG, and VGT. Growth (SCHG) has smashed the performance of value (SCHD) in the past few years (really for a decade+ now). But I still think having some value in the portfolio is always a great idea in all markets. We never know then the market will rotate towards value again.
@@JeffTeeples Thank you so much Jeff. Really appreciate your advice. Great analysis. I really enjoy your videos! Do you buy any individual stocks like Nvidia? just wondering your thoughts about that.
I do buy individual stocks. I'm ramping it up more as time goes on. I don't hold Nvidia specifically, but my results have been pretty solid so far. I started on 4/20/2023, and the portfolio is up 64.16% vs the markets 36.9%. Off to a decent start, but who knows what the future will hold.
@@JeffTeeples That's awesome! Great job. Good for you :) That's true. Thank you for sharing! What percentage of S&P 500 or VOO would you recommend for me to have in my portfolio if I am in my 30's? I am hoping to retire early and what percentage of VGT and SCHD would you recommend? Thank you so much!
VOO is nice because it is well balanced in and of itself. You can go anywhere from 1% to 100% of your portfolio in VOO and you'll do great. I like to use SCHD to counterbalance VGT a bit. When you combine them together, they make a 'similar' mix to the VOO. Not as far as the exact holdings, but most of the key performance indictors like PE ratio, dividend, returns, standard deviation, etc. SCHD + VGT is superior to VOO on dividend growth and has a higher yield too. The total returns have faired well too. I would say add 'roughly' the same amount of VGT and SCHD to the portfolio. You are young, so perhaps having a little extra VGT or QQQM compared to SCHD is fine. But I wouldn't get too out of balance. I prefer a third of each, but I'm also in my 40's (:
Nice video Jeff, thanks for sharing. My portfolio is SCHD, SCHG, VGT, ARKK and QYLD 20% each one. I'm also a non-US citizen and the 30% on dividend taxes kills me. So, I'm currently thinking in getting rid of my positions in SCHD and QYLD to only invest in growth ETFs while still in my 30s, and once I reach 50 years old go back to 50% SCHD and 50% VGT/SCHG. Wha would you do? Thanks in advance!
Thank you for watching and for the comment. I personally would drop ARKK. I actually just made a video about it, but it will not be dropping for a couple weeks. I don't like actively managed funds, and ARKK has been brutal. A total return of -63.59% in the last 3 years (as of today). In that same time, VGT is up 37% and QQQ is up 32%. That wasn't a typo, negative 64%. Total return in the last 5 years ARKK is 24% to VGT 191% and QQQ 161%. But it's not just about past performance. It's about consistency. Also, even if she does match the market over the next few years, you still lose 0.75% off the top, which will be hundreds of thousands over the years due to the compound effect of the expense ratio. If you were rolling without dividend ETFs (which I think is fine in your 30's, I did the same) I would probably do something like this: QQQM 33.3% / VOO 33.3%. / VGT 33.3% VGT is great, but it is 100% tech. If it crashes way down, just keep buying. I've lost 6 figures on it, but my overall cost average is ~$287 Then the other two are the markets that have nice history and solid balance. VOO for S&P 500 as a stabilizer (without a dividend ETF) and QQQM as a quality growth ETF to pair with VGT. Just know, you will lose a TON of money at times. If you don't let that deter you, and you keep buying, you will very likely be wealthy in 20 years. SCHG is solid (going to make a video on it soon), but QQQM and VGT have destroyed it over all time periods. If you REALLY have an iron stomach, 50% of VGT and QQQM would be nice (scary, but nice). Just delete the SELL button from your online broker (:
Hey Steve. I don't think there is a 'right answer' to this one. A lot of smart people will say anywhere from monthly to never. For me, I like to 'rebalance' with my new contributions as much as possible. Buy to the target allocations to always get the relative dip within the portfolio. I think once a year is a good rule to officially rebalance. It will give time to let the winners run and to keep buying more of the losers. I personally don't rebalance. At least, I haven't 'officially' done it yet. But I left my six figure job to start this channel, so it my be necessary soon (: I used to have enough 'new money' coming in to keep it somewhat balanced in general.
@@JeffTeeples i may take the once or twice a year approach. i plan to deploy this in one of my long term accounts but with a schg/schd combo. thanks for the strategy idea
Hello! I have a question for you. I currently have VGT and VUG…I am considering replacing my VUG with SCHD in my retirement account. Do you hold SCHD in your personal brokerage or retirement accounts instead?
Hi Tiffany! Thanks for the question. I hold SCHD in my taxable account and my retirement accounts. I think it's great in either (because the dividends are qualified, which means they are taxed at a special tax rate and they do NOT add income to your tax return. They won't push you to a higher tax bracket). SCHD is slightly nicer in a retirement account because the dividends will not be taxed at all (until the money is removed if in a traditional). The beauty is, you can sell VUG in a retirement account and buy SCHD right away with zero tax implications. In a taxable account, you want to make sure you've held it for more than a year, or that it is at an unrealized loss before you rebalance. But your retirement account is good to go on selling and buying any time.
If you have 401k w/ Fidelity, is it best to have Fidelity equivalents for VGT/SCHD to go along with FXAIX and maybe a FXNAX? Just started Roth IRA the other day, and able to add max for 2023 and 2024 for wife and I.
Thanks for the question. You can actually buy SCHD and VGT in Fidelity fee free. They don’t charge extra for ETFs, it is only other mutual funds. You can use FTEC instead of VGT, either is great.
Thanks for commenting. Allllllll aboard. Make sure you hold on to something because it can be a bumpy ride! When it dives down, I stay the course and dollar cost average in!
I agree with this one. It has done very well over 40 years, however, I have to get creative with the back tests because the specific ETFs aren't around. But VGT is competitive with QQQM over the past 20 years, and the Nasdaq-100 has dominated the S&P 500 over the past 40 years (even including the major recessions) by a solid amount. More years in the future will unfold the story. I like the mix for now, and I'm excited to see what happens moving forward.
Your strategy will work well as long as tech continues to outperform. If there is a prolonged period of tech underperformance it's likely that a 50% weighting in SCHD will not be enough to have you outperform the market, even though it has been enough to shield you in temporary sell-offs in tech during your holding period. The bottom line is you are investing and I think you are going to do well in the future.
Hi Aaron. Thank you for the detailed feedback. I agree with your assessment. My ETF portfolio is a third each of VGT / VOO / SCHD. This video separated out that piece to show the 1-2 punch of SCHD + VGT, but I still am a huge believer in 'the market' in general. I'm also adding some QQQM to the growth section in the future (spoiler alert for my video coming this week). Thanks for taking the time to provide feedback. I would love to have you along for the ride if you're interested (portfolio updates every month with exact holdings).
I’ve been doing a lot of ETF combinations on portfolio visualizer. So far only 50/50 SCHD/XLK beats 50/50 SCHD/VGT portfolio. And it only beats by about a .2-.4% wow
Thanks for the comment David! XLK is a beast. It and VGT have an 82% weighted overlap. With the higher concentration of funds, XLK has been better in the last 10 years. It has 67 holdings compared to VGTs 315. They are basically tied since VGTs inception. Can’t go wrong either way.
Thanks for the question. Also, #DogeArmy!!! (I have a small holding). JEPQ is great for cash flow purposes. For a long-term, buy and hold total return centric solution, I prefer VGT or QQQM to JEPQ. I think they are all great investments!
Hello I am 20 years old with very high risk. I’m not thinking of adding any dividend etf any time soon. I have 40% in VGT 40% in QQQM and 20% in VOO what do you think of this portfolio? Thank you!
Hey Alexander. I don't think the portfolio is bad, but it is heavy in growth stocks by weight. You will likely see some major downside when the 'next big thing' hits. Perhaps down 75% vs 35% of a balanced mix, or something like that. However, if you stay the course and NEVER panic sell (say, for example, the next dot com like crash), and remain a buyer, you will likely be 'stupid rich' when we zoom out 30 years. Remember, you will have to keep buying when you $1,000,000 portfolio is worth $250,000. It sounds easy in theory, but few can do it. I am among the few, I never, under any circumstances, panic sell (I sell only to move stuff around in general, small changes). This portfolio will take a strong stomach and major patience, but could pay off disproportionately well long-term.
I'm not a fan of leveraged ETFs in general, personally. It can backtest well during bull markets, but is way too risky for my taste. I prefer QQQM if wanting exposure to the Nasdaq-100.
Love the suggestions, although I couldn't find the correct ETFs on 212, does that mean they don't hold them, or they go by a different name? there are some confusing overlaps with the tickers when I search. Thanks in advance
Thank you for the kind words. I have never used Trading 212 before, but I'm shocked they don't have the ETFs mentioned. SCHD and VGT are pretty big ETFs, and I've never heard of them being exclusive to brokers. Everything I've used has access to both. If it has FTEC, that can replace VGT. Or XLK (is somewhat close). SCHD is fairly unique. You could try DGRO as a replacement. VYM if you want to get closer to the yield of SCHD (but sacrifice dividend growth).
@@JeffTeeples thanks for the reply. I will take a look in case it's just me being daft. I know currently the sp500 that I use with them is that VUAG, but again there seem to be so many variations for the s&p500 that it's overwhelming and hard to know the difference between them all lol
I'm a fan of SCHG and SPLG. I think a 50/50 mix would do well. It would be too heavy in growth for my blood. I like something that is a nice mix between growth (SCHG, VGT, QQQM) and value (SCHD). The combination of the growth ETF + SCHD will have a similar PE ratio as SPLG. SCHD is ~16 VOO is ~24 VGT is ~32 Combining a growth ETF with a cornerstone will do well over time, but it will struggle when the market turns back to value. Shoot, in the past decade, VOO + VGT outperformed SCHD + VGT, but I still like more value mixed in.
Oh yes, by a decent margin. I don't remember the numbers I used in this video, but I think it was 2014 through 2023. Here is what it looks like if we start with $10,000 and contribute $1,000 per month. Ending amount: VGT/SCHD: $351,145 SCHG/SCHD: $306,873 10-Year annualized returns: VGT/SCHD: 15.77% SCHG/SCHD: 13.39% VGT has been better by a wide margin in the last 10 years, and also by even more since SCHGs inception.
What is your opinion on 50% FTEC 50% VGT...it does beat the S&P 500 every year and only loses to VGT on one down year? I only ask because it costs 20% less at 0.08.
Hi Jeff, first time here, just subbed and read all 200 comments and replies.I'm retired and coming out of a 50% cash, 50% vym and looking to rebalance to 30% vgt, 30% voo,30% vym and10% cash. My concern is the overlap of vym and voo.I seem to be doing ok on Social Security alone , all bills paid and in 4 years will be paying rmd's, and am questioning the logic of collecting dividends. Any help on this rebalance would be much appreciated!
Hey Mark, thanks for watching & subscribing. I appreciate it! VOO tends to have a lot of overlap with most popular ETFs, because VOO has 'a bit of everything' by holding the 500 largest US companies. It holds 86% of ALL stocks in the US. I wouldn't worry too much about the overlap with VOO and VYM because of the passively managed nature that both use. VYM is grabbing high yielding companies and VOO grabs the 500 companies based on market cap. Overlap is inevitable there. However, I really would strongly consider getting SCHD to take the place of VYM, potentially. Or at least as a slice of that 30% (the dividend ETFs). You could do a 50/50 mix of SCHD and VYM within that 30% (so 15% of each overall). I'm not a fan of 'telling people what to do' because there are so many great investments. If you had DGRO or VIG, I wouldn't recommend it because you're likely going for dividend growth and price growth as well. However, as solid as VYM is, it really falls short across the board to SCHD, even with the rough past year for SCHD. Here are some of the key metrics: 1) They both pay qualified dividends (taxed as favorably as possible, 0% to 15%, depending on where you fall on the tax tables (up to 20% for people that make a LOT of money, but uncommon in retirement). Taxes don't get cheaper than this, it matches the long-term capital gains tax rate. Favorable to ordinary income (job wages, social security, pension payments, etc). 2) SCHD only has an 11% overlap with VOO, VYM has a 32% overlap 3) SCHD only has a 7% overlap with VGT, VYM is at 10% 4) SCHD yields 3.45% to VYMs 2.44% 5) SCHD grows its dividends by 13.05% per year over the past 5 years, and 11.39% over the past 10 years. VYM has a 5y growth of 0.83%, and a 10 year growth of 4.67%. 6) SCHD 5Y total return is 81.94%, and 10Y total return is 201.23%. VYM is 59.51% and 158.32%, respectively. Again, they are both solid, but I think SCHD is way better for that portfolio mix from pretty much any angle. I'm going to make a video soon about qualified dividends held in taxable accounts vs growth. The pros and cons of each.
Hey Jeff, thanks for the question. SOXX and SMH have been amazing, but I can't get myself to niche down that much, personally. I do roll with VGT, which is 100% tech, but it is fairly well diversified 'within tech'. But as far as the results are concerned, the semiconductor ETFs have been amazing. I am mixed on Bitcoin in general, but I do like IBIT a lot as an investment. It's a lot to type out the pros and cons here, but check out this video for more details. ua-cam.com/video/3gtladwRgn0/v-deo.htmlsi=ef6uQc6N-swMGO7d
thanks for this great video and the graphical explanations, now where were you 10 years ago =p that's when i needed it the most :) Keep up the great videos!
Thank you for watching & for the comment. The beauty is, 10 years ago was identical. Dollar cost averaging into these (or any well balanced) portfolio allocations uses the exact same process with $1,000 or $10,000,000,000. In 10 years from now, I will be dollar cost averaging into a MUCH bigger (hopefully) balanced portfolio with no additional 'professional advice' needed. The one rule, never sell. Unless life MAKES you sell, never sell because you think 'things might get bad soon'. That is where the cash on the side will come in. If things crash, you can buy more (:
Thanks for watching and leaving a comment Sky Tech. And an even bigger thank you for going the extra mile as a channel member. I appreciate it. I think VUG & VOOG are great multi-sector growth ETFs. I slightly prefer SCHG or QQQM to them, but we are splitting hairs. VGT and XLK are both awesome tech focused ETFs. My favorite is VGT (I like pulling in the small and mid size companies), but they are 'basically' the same. You do have 100% 'growth ETFs' there. It is okay as long as you have many years / decades to continue to invest. When the market crashes, they will crash harder. That is fine if you remain a buyer and don't panic sell during the drop. You will be buying more shares per dollar as everyone around you runs.
This is a tough one without a 'right answer'. In my opinion, which aligns with the late Jack Bogle himself (the grandfather of index investing), I don't invest outside the US stock market in our current situation. It has made a $400k+ difference for me over the years. BUT... I watch it constantly and will dive in, likely a little too late, when I feel it makes sense. Many like doing it now and always to be ready for the changing times. I think the opportunity cost is too great, but I understand the viewpoint, and do not think it is 'wrong'. They would argue, perhaps correctly, that I will 'miss the boat'. Short answer, it depends on the person (:
Thanks for the question. It does. And sometimes 'letting the winners run' is a better way to go. However, I've always been a fan of sticking to my allocations. I've been able to do this, over the years, without doing 'official rebalancing', because I buy my struggling positions (SCHD lately) back to the allocation with new money. But yes, I use the rebalance annually for the information in this video.
Thanks for watching and commenting Gian! That is a very nice portfolio. I have to say that, because those are my exact holdings (: I am lighter on JEPQ, and I have it in my greedy cash section, but the other 3 I have a third of each. Keep dollar cost averaging into that thing for years and you’ll build some nice wealth!
Thanks for the question. For a brokerage account I like VGT and QQQM for growth ETFs, SCHD for dividends, and VOO or VTI for a cornerstone holding. For 401k, I think 'usually' a low-cost S&P 500 fund is the best option to DCA into long-term. If unavailable, the low-cost target date funds aren't terrible. 401k are usually limited, so the answer is 'it depends what it has available'.
Jeff thanks for your reply. I am self employed and have my ROTH, SEP and brokerage accounts with Schwab. So I have access to most of the funds in the market.
Great video. Substitute DGRW for SCHD and see the results. More diversified fund, too. Higher return with a little less downside protection. Great return either way. Agree that VOO as a third fund in equal parts is the way to go. I don’t disregard the Oracle either.
Thanks for the feedback Dustin! DGRW will definitely outperform SCHD over 'most' time periods. It is a hybrid fund, that I think is quite good! But replacing SCHD in a portfolio is apples to oranges. DGRW has a 42% overlap with VGT as opposed to SCHD's 7%. The highs will be higher, and the lows will be lower. I think SCHD is a much better compliment to VGT. If I was adding DGRW, I would consider it VOO. Or I would reduce VGT and SCHD equally to make room for DGRW. However, DGRW doesn't perform as well as 50% of VGT & SCHD. I think DGRW is an awesome jack of all trades fund. I made a video about it recently. Definitely not a bad choice for any portfolio. There are so many great options. This is why I think DGRW makes a competitive cornerstone: Total returns: DGRW: 1Y - 18.6%, 3Y 38.4%, 5Y 99.9%, 10Y 210.9% VOO: 1Y - 25.3%, 3Y 32%, 5Y 100.4%, 10Y 206.6% DGRW yields 1.76% dividends compared to 3.48% of SCHD. It's 5 year dividend growth rate is 6.31% compared to SCHD 13.05% Now VOO is very similar with a 1.48% yield and 6.06% 5 year dividend growth rate.
Thank you for the question. Unfortunately, I can’t pull that information. However, this is why I still buy a big chunk of VOO. I love the 50/50, and it has dominated the market for 10 years in a row. However, it’s been a tech bull run (really for the past 30 years, even including dot com) lately. I think it will continue, BUT, I don’t know that for sure. And I KNOW VOO has done well for over 100 years. I like to stay open-minded and up-to-date. I’ll be the first to share when something changes.
Hi Jeff, greetings from Canada. As a Canadian I invest in ETF's traded in the TSX mostly to avoid FX fees and currency exchange. Currently holding Vanguard's VDY (Canadian high dividends), VUN (USA Total Market) VIU (Developed markets ex NA) and VGG (US Div Appreciation). I dont really see anything similar to VGT and SCHD in the Canadian market that I could use to emulate your portfolio. I wonder if you could help me and give your opinion on this.
Thank you for the comment & question Danilo. I'm sorry to say that I do not know a lot about the Canadian investment options. I don't want to provide you with a quick answer than could be misleading. This is something I plan to study up on so I can be more helpful in the future.
I'm with you on that one. I don't see technology going anywhere. It will evolve and the 'next thing' (like AI now) will emerge. Owning the basket of tech is a great way to go.
Thanks for the question. Historically I would 'rebalance real-time' as I dollar cost averaged into the underweight position with new dollars. I no longer have high income from my job, so I may need to rebalance annually at this point (in addition to DCA in whatever I have during the year to the underweight holding).
Great video and analysis as always. I started with a 50/50 split between VGT and SCHD. Only recently have o started to build up the cornerstone VOO position. I have pondered this *a lot* and think I will go with a split of 40% VGT, 40% SCHD and 20% VOO. What kills me is the 30% tax I need to pay on dividends as a non us citizen… I am 44 now so perhaps I should allocate 30% to SCHD and 30% to VOO for the next 5 years. Can’t decide. My situation slightly different. What would you do? Thanks Michael.
Thanks for the comment Michael! Always look forward to hearing from you. I think both of your ideas are great (from an allocation standpoint). I would likely favor the second allocation more because of your tax situation, assuming you have at least 5 to 10 years of working (or earning) ahead of you. I say that because having more money to DCA in will help when VGT takes big dives (and it will!) over the years. If you stay the course, it has historically always shot UP way more than DOWN, long-term. Then in retirement you can strategize a gradual move to more dividends as the years go by.
@@MichaelRosch-q6p Haha, that’s true Michael. I want to always get back to each comment. I may eventually have to scale back a little bit! But, the community is my favorite part of this! I’m here to help others as much as possible.
Thanks for watching and for the question. Any ETF I recommend will work well in a taxable account. That is primarily because I only invest in ETFs that pay qualified dividends. This means the dividends are taxed at the same rate as when you sell a holding for a long-term capital gain. SCHD, VGT, XLK, QQQM, DGRO, DGRW, VOO, VTI (I'm just going off the top of my head) all fall in this category. Now, if you want to minimize qualified dividends over the years, you'll want the higher yielding ETFs like SCHD and VYM in your retirement accounts, and lower growth based ETFs like VGT, QQQM, or even VOO/VTI in your taxable account. I ironically do it backwards for tax reasons and cash flow. I plan to make more videos in the future discussing the tax implications of long-term holding. Many people think that reinvested dividends are basically taxed twice (as qualified dividends when paid, which is true, and at more future gains, which is false). When you reinvest dividends, your gains are zero and will never be taxed for the transaction in the future (outside of the qualified dividend tax that year). For example, let's say you have $2,000 of an ETF, with a cost basis of $1,500, and it pays you $100 in dividends. You have a unrealized gain of $500 that you will owe long-term capital gains tax on when you sell. You will pay the qualified dividends that tax year at the long-term capital gain tax rate (best tax that exists). If you reinvest the dividends to buy more of the ETF, you now have $2,100 at a $1,600 cost basis. You still carry a $500 gain that will be taxed some day when you sell. Your value, and your cost, raised by $100 each, which made for an unrealized gain of $0 for that reinvestment. You will never be taxed for 'that' again if that makes sense. You are only on the hook for $500 (of course, please any future gains on everything). If the company didn't pay dividends, but increased by $100 more (price growth instead of dividend), you would be carrying a $600 gain to be taxed some day. Edit: I should specify, I have recommended JEPI & JEPQ, which is (mostly) not taxed at the favorable tax rate. I thought I should point that out.
New sub here, great videos! Im very new to the ETF world or investing in anything other than my govt 457 ROTH. I have a few questions, maybe you can help - I just learned I can manage my own ROTH 457 through a PCRA Schwab account and want to purchase SCHD and VGT. I want to invest the maximum ($23,000 a year) for 15-20 years and retire early at 50 or 55. 1) what percentage of each would you invest into if you want an extra source of income through dividends at retirement age? 2) Are these 2 ETFS the only 2 to buy from here to retirement? Should I throw another in the mix? Thanks for your help!
Thanks for the new subscription & for watching! 1) This will depend on your current age, years remaining of work, and your goals. For me, I'm in my early 40's, and I like an equal mix of VOO / SCHD / VGT. SCHD/VGT because they are great compliments to one another and they beat the market. VOO (this is 'the market' that everyone is trying to beat, the 500 largest companies in the US) because it has an amazing 100+ year track record and we never know what the future holds. In my early 20's, it would look something more like 50% VGT / 35% VOO / 15% SCHD. In retirement it could look more like 80% SCHD / 10% VOO / 10% VGT. 2) There are so many great ETFs for what I consider 3 main categories. Growth ETFs are things like VGT / XLK / SCHG / VUG / QQQM. My favorite is VGT. QQQM is also awesome, and a bit more diversified. QQQ (QQQM is the same with lower expense ratio) is somewhat like the 'S&P 500 index' in the growth world. It's 100 of the largest companies from the Nasdaq index. Very tech heavy, but not as much as VGT. Cornerstone ETFs are things like VOO and VTI. This gives you a slice of everything. Sold dividend companies, growth companies, and anything in between. Dividend ETFs are things like SCHD / VYM. These hold more companies that focus on dividend payments, and are generally less volatile with the crazy market swings. There are a TON of quality options in each category. The main concern is that you don't have 100% of any one 'category' (all growth, or all dividend). The only type that 100% is okay is the cornerstone, something like VOO or VTI. SCHD / VGT is an awesome combo because they are VERY different. So you have good coverage. Can't go wrong with that 1-2 punch.
@JeffTeeples Thanks so much for the quality reply! I'm in my mid 30s and I plan on retiring at either 50 or 55. I only have about 10k saved up (besides pension) and want to put all that into a mix of ETFs. I will start overdriving my savings and doing the max contribution of 23k a year. My retirement goals are living off of my pension and hopefully supplementing that with some type of dividend return. With those facts, how would you invest into ETFs and at what percentage?
It is hard to answer something like this without knowing all the details. But from what I gather, you have ~20 years to invest, and you have enough income to fully max a 401k each year. This is fantastic! It still depends on your risk tolerance. By default, I would throw something like 40% VGT, 35% VOO, 25% SCHD. But if you want to get aggressive, you could go 50% VGT (knowing you have a lot of time to recover from the big dips that will happen), 35% VOO and 15% SCHD. As you get closer to retirement, and in retirement, you'll likely want to lean to more and more SCHD for the dividends. With how much time you have, any mix will work. I would lean as much to VGT (or QQQM if that is your growth ETF) as possible in the early years if you are investing every month. I've lost 6 figures in my portfolio before as I was heavy in VGT until recently. But zoom out and VGT is up nearly 500% over the past 10 years, while SCHD total returns (including dividends) is under 200% in that time-frame. The market, VOO is up just over 200%. VGT 'usually wins' the longer you dollar cost average in, but everyone needs balance. We never know when the next dot com will devastate VGT. When it does? BUY BUY BUY! (:
I'd like to challenge you on the growth prospect of VGT. 53% of VGT is in MSFT, AAPL, NVDA & AVGO. These 4 experienced phenomenal growth over the last decade and that's the reason by VGT did so well. While I still have my faith in MSFT, can the other 3 keep up with the same level of growth in the coming decade? If not, the VGT won't grow like it did.
Thanks for watching and commenting! This has been a concern by many about VGT for the past decade (and really longer than that). If those 3 companies didn’t do as well, they would scale down within VGT (and QQQ as well) with the way the index is managed (passively). However, if that is a concern, I would highly recommend QQQM for the investor over VGT. It’s also a great growth ETF and not as top heavy as VGT.
Jeff - In one of your previous videos, you recommended a modern three fund portfolio of VOO/VGT/SCHD. Do you think the 50/50 allocation of VGT and SCHD is a better choice? And is XLK a good substitute for VGT?
Thanks for watching & for the feedback Bruce! 1) I do prefer about a third each of VOO, VGT, and SCHD. The 50/50 mix of SCHD and VGT somewhat creates a super version of a cornerstone holding because it ultimately makes a nice hybrid of dividend and growth stocks. It becomes a VOO, in a way, but of high quality companies in each category. However, the S&P 500 has well over 100 years of data proving that it is an extremely difficult index to outperform. The best investors in the world simply suggest that common folks like me invest in something like VOO and stay the course. When they are being honest and not trying to take my money. As much as I love THE mix of SCHD/VGT, I don't know how it will perform over many, many decades. I haven't seen it in the dot com crash, or the crazy 2008 situation. I want to stay open-minded and flexible as much as possible. The mix has won every year I've invested, but I STILL consider VOO a nice stabilizer to have in my portfolio because past performance, especially the recent past, doesn't tell all of the story. 2) XLK is a great replacement for VGT. It's actually been quite a bit better recently because of the more concentrated methodology. It has 67 holdings compared to VGTs 318. They have an 82% weighted overlap, and are fully replaceable. Both are 100% tech. I prefer a few more small and mid sized tech companies in the basket, but you can't go wrong either way. It's crazy when zooming out and looking at the total return since 2/1/2004 (when VGT became available): VGT: 1,091.79% XLK: 1,089.21% The 'winner' changes constantly.
@@JeffTeeples thanks. I always wonder if I should be doing anything different but I have a good amount in these taxable accounts. I also have a military pension at 80K a year currently and my 401k which I rolled over from my military tsp which should be worth 1.1 to 1.5 at 60 when I can draw. I really don't want to work after 60. I have another 15 years until then. We'll see what the market does.
Thanks for the question. SCHD was new in 2012, so I think VOO would outperform it that year, and it is basically tied in 2013 if I’m not mistaken. I started with 2014 to grab the first full 10 years for my UA-cam videos, and reflect my portfolio. I will not be cherry-picking start dates in the future updates, we will build from 2014 (I was 100% VOO before that, then started to dabble with the mix).
Thanks for watching and for the comment. SCHG is solid, and is more balanced than VGT. QQQM is my favorite pick for not 100% tech growth. It usually has a similar tech % on the allocation to SCHG, and I like the mix a little better. But you are set up for great success with your mix as well! There are so many great ETFs.
@@JeffTeeples thanks for sharing your insights, I know it takes work to put these videos together. I appreciate all the people that take the time to provide a little education to help us novices.
VOO/QQQM/SCHD adjust % for age. Feel like we're all on same page whether it's a new age 2 or 3 fund portfolio. Bonds and International stocks have been replaced by growth and strong dividend stocks/ETFs.
Thanks for watching & commenting Travis. I agree with you, especially if the person has a long time period to continue investing. Bonds, to me, have never been worth it outside retirement (where I still think there are better setups, but they at least make sense). But I have a very long mindset with investing. If bonds are flat and VGT is down 25%, people will be screaming 'I told you so', while I'm licking my chops and hitting the buy button on VGT and VOO (: That is why time is absolutely required. My 'cash' stays in a money market, and I do think cash is important. About 10% of my portfolio. The international exposure is a larger debate. I'm comfortable with the business conducted within the ETF holdings. However, I maaaaaay eventually own an ETF to get actual international holdings. Time will tell. People holding 30% or more have lost so much compound wealth it is unreal. I would rather be slightly late to any core changes.
Great info, question- i have fedility 401k, How can i get voo, vgt, schd, gling through fedilty could be higer fees, i can open a vanguard account best option
Thanks for watching & for the question. Fidelity does not charge extra fees for ETFs. SCHD, VGT, and VOO are all ETFs, so you're good to go. Fidelity specific would be FTEC for VGT & FXAIX for VOO (but it is an index fund instead of an ETF. ETFs are 'slightly' better IMO, but it doesn't 'really' matter).
My current Roth IRA consists of 1.SCHD 2. QQQM (might switch to VGT) 3. SPLG 4. JEPQ 5. O Thoughts? I’m 33. Also have a TSP ROTH IRA through DOD. Which is focused on growth, so this is why I’m more focused on dividends
Thanks for watching & commenting. SCHG is a solid growth ETF. It does fall quite a bit short of QQQ and VGT over the years. I think I’ll make a video within a couple weeks about SCHG. Stay tuned!
Hey Steven! Thanks for the question. Qualified dividends are dividends paid by US companies that you have held for at least 60 days. Most of the ETFs I discuss pay 100% qualified dividends. SCHD is in that club. They are taxed at a VERY favorable rate & the less known fact is that the taxes do not affect your marginal tax rate at all. It is all added up AFTER your ordinary income makes up your federal tax rate. Most people are taxed either 0% or 15%, depending on your marginal tax rate (from your ordinary income). For very high earners the special rate is 20% (instead of their number 37%). Long-term capital gains (stuff sold after owning for at least a year) and qualified dividends get the same special tax treatment of low tax rates and not being involved in your 'normal taxes' at all (tacked on after the fact).
VOO and VGT would be okay for a younger person with 15+ years left to invest. SCHD is what provides the floor to help VGT+SCHD beat VOO in the bad years. With VOO and VGT, the bad years will be REALLY bad. But, that's okay if you keep dollar cost averaging in during that time and you don't panic sell when everyone else is running.
There are different schools of thought. I believe in ZERO 'timing' the market. I'm 100% time in the market. It is proven to win over longer stretches of time. Plus, if you have 10% cash, like I keep, when the market goes way up, you naturally will put new money in cash to get it back to 10% (so you're not buying high without a decision). When the market crashes, you're naturally putting all new dollars into your portfolio (buying the dip) to get cash back to 10%. I think that finding a system of qualify investment and staying the course is the best way to build wealth. Some will say 'but what if it's at an 'all-time high!'. To that I would say to research all of the new 'all-time highs' (:
Hey Kevin. There is. Dividends will create a taxable event (regardless if they are reinvested or not). SCHD and DGRO are taxed as qualified dividends, so the special tax table is the same as long-term capital gains, but it is a ‘forced taxable event’. Price appreciation will be taxed the exact same, assuming long-term capital gains. However, you don’t pay anything until you choose to sell. I personally don’t mind the forced taxable event with qualified dividends. I think 15% is as favorable as it will get for me.
I've been on 50% SCHD and 50% VOO, but will start adding in VGT monthly from now on. Thanks for the great content.
Thank you for the comment. I think you’ll be happy, long-term, with that mix! If it crashes down a bit, remember, keep buying. Never sell (or at least not until many years later).
@@AntoH this is so helpful
I love this! I currently rebalanced to VOO 40% VGT 15% QQQM 15% and SCHD 30% . I couldn’t decide which to keep for growth so I’m keeping both.
Thanks for the feedback Aaron! I think you have done an amazing job!
I'm often torn between VGT and QQQM. I have rolled with VGT so far, but wouldn't be shocked if I have both long-term.
SCHD is a no brainer for me. It's not that I think it will outperform all of the other dividend ETFs every year. It certainly didn't in 2023. But it's an AMAZING counter-holding to VGT when the market is dropping.
Have you considered XLK. Very similar fund to VGT, but has outperformed it significantly. It’s made up of the Tech companies from the S&P 500, so their companies that are a little more proven than some of the smaller ones that come with VGT.
I like a 50/50 QQQm and XLK combo but my goal is maximum growth and I’m not concerned about the dividend income this stage of my life in my mid 30s.
Thanks for the comment! I do love XLK & QQQM. Awesome mix you have there!
XLK has ran away with the crown over the past 1-3-5-10 years for sure. Zooming out, it and VGT are within 1% on total returns (1,086 to 1,087%) over the past 20 years.
Over 80% fund overlap with VGT and XLK. I don’t think you can go wrong either way.
Stay the course and you’ll likely be a happy camper in retirement!
I use FTEC instead of VGT ( they are basically the same). The thing is, I saw way too much overlap between VOO and QQQM and FTEC and QQQM. But VOO and FTEC is only 30% overlap. So as much as I didn't want to give up my QQQM, I did. Sold it all for more VOO and more FTEC. But I'm with you, I love QQQM.
@@roymoore7743 thanks for the comment Roy.
I’m with you, FTEC is awesome! The overlap is a little lower with VOO because FTEC is 100% tech. I’m a tech bull, so I like that.
But I do think the overlap of QQQM and VOO is more healthy than a typical 46% of two ETFs because they both capture a market real time based on market cap. Companies will come and go, so they will both properly update for the new trends over time. But it does come with overlap.
The 100% tech sector of VGT or FTEC is probably technically more dangerous over the years. But I love tech looking forward!
I realigned my Roth this year. I now have 40% in VOO, 30% in SCHD, and 30% in QQQM. In my brokerage account, my goal this year is to invest $50 a day into VGT. It isn't much but I think it will really help my portfolio. I just recently started option trading and any gains in that will likely go into SCHD. Really appreciate your video!
Thank you for watching & commenting. You have a great set up! If you are able to invest $50 per day you will very likely be a happy camper down the road!
$50 a day is plenty, trust me. I do around $90 a month on various stocks lol
I believe in this 50/50 growth and SCHD mix. I am going to do this in my Roth IRA that I am starting. I already have 150k in TSP C fund (basically VOO). SCHD makes more sense than bonds and international. I agree and glad I discovered this strategy.
Hey Tony. Thank you for the feedback. I'm glad you like the strategy and are giving it a go. VOO is a great holding to have as a cornerstone as well. My 3 favorite ETFs (: I wish you well with the Roth growth over the years. I think it will do great.
I was thinking of this plan recently for my ROTH IRA and this video cemented my idea!! thanks!! good luck to us. cheers !
Thanks for watching Joel. I wish you luck with this setup. You won't need it as long as you stay the course long-term (:
$10K invested in VGT from 2013 became $89,770 today with a 20% annual increase.
$10K invested in SCHD from 2013 became $42,158 today with a 12.7% annual increase.
I would put all my bucks in VGT and “let it ride”.
Thanks for watching and commenting. VGT has been a beast, but it has also been a bull market over that time.
SCHD is a nice low-tech counterpart to assure your portfolio beats VOO yearly for when VGT is beat up.
However, if you’re very young, I think riding VGT, with a rule you will not sell no matter what, isn’t the worst idea ever (: I don’t see tech dying off, at least in the near future.
Watched this video again. That 50/50 mix is mind blowing at the end. I wish they taught this in high school I’d be retired by now. Better late than never I guess.
Amen Kevin. It is never too late to get the ball rolling. That is the main reason I made this channel (:
Understood. Your DGRW video was great too. SCHD has a low fund overlap with VOO, but most of the well-known “dividend” ETFs such as VIG, DGRO, VYM, etc do not by comparison. I was simply surprised that after substituting DGRW into Portfolio Visualizer for SCHD and pairing it with 50% VGT, it provided a higher 10 year return than SCHD, and every other dividend fund I could think of, including NOBL, HDV, DVY, FDVV, and DTD as well. As you suggested if it were to be integrated, the VGT and SCHD %’s can simply be reduced, which worked well too when backtesting. Just an observation. Thanks for the great content!
Anytime, thanks for the feedback.
If I could only pick one ETF to have, DGRW or SCHD, I would easily go with DGRW.
It’s the upside / downside combo of VGT / SCHD that makes it so special.
Basically, SCHD + VGT is ‘similar’ to 100% DGRW. But the VGT/SCHD is better on total returns (because of VGT), dividend growth rate (because of SCHD) and dividend yield (because of SCHD).
SCHD is cash flow and downside protection for an aggressive growth.
But in a vacuum, DGRW or SCHD, pick one and one only, I would go DGRW.
This exactly what I have 5k shares of SCHD and 500 shares of VGT! I'm adding approximately $2500 every month!
Thank you for commenting. That is an amazing portfolio. And $2,500 per month will add up sooooo nicely. Great work!
That’s a monster portfolio! Congrats!
How much is your investment ?
Do you sell covered calls?
@@hanwin651 If you’re asking me (all the comments are strung together on my phone), I just released a video with this.
Thanks for watching and commenting!
Love it! I landed on 50% ITOT, 35% FTEC & 15% SCHD and plan to leave like that for the next 10-15 yrs.
Thank you for watching & commenting. That is a fantastic mix for a portfolio! Get's a solid 50% in a cornerstone that will reflect the market, 35% in my favorite growth index (same is VGT), and 15% dividends!
I would be FLOORED if that didn't work after dollar cost averaging in for 10+ years.
Hi Jeff, the majority of my investments are in VGT and Semiconductor stocks and ETFs. Watching your videos I have decided to DCA my new money into SCHD and DGRO and trim some stocks once they hit price targets and take profits. The reason I own DGRO besides the The growth and dividend play is they own specific companies like Visa, Walmart and a few others that I would like to own. I like the way you approach the market. Investors today have great access to good information and low cost investments. I am 55 and have seen how mutual fund fees and advisor fees negatively impact the market.
Hey Chris! Thank you for sharing your situation and a *huge* thank you for becoming a channel member. I see that shiny badge. It is much appreciated.
I think it is a smart move to mix in SCHD and DGRO to your current portfolio. Truth be told, I was heavy in VGT for a few years myself. The ups are just too juicy to ignore, and the downs made me happy because I would buy more. Maybe something is wrong with me, haha. But eventually I decided to find a nice balance and never look back.
I think it will help us do better in all markets & it will also help us sleep like a baby (:
Great video! I like the way you weakly said peace at the end of the video made me laugh. lol
LoL, thanks Oldrin. I'm not really sure what is going through my head by the end of the video. I usually will do something weird just because at that point (:
That was hilarious. 😆
Jeff, You are right. I am wrong. Thanks!
I was right!? You should share that with my wife! I like it!
Great stuff - I tried to tweak my own mix (SCHD, VIG, QQQM, O, VOO) to beat this allocation and I couldn't do it. This 50/50 mix is elite. I'm considering moving my own portfolio in this direction now
Thank you for watching and commenting!
Your mix is full of high quality holdings. You could always sprinkle in an allocation of VGT and adjust the portfolio slightly from there.
You'll be a happy camper if you dollar cost average into your setup and hold for many years.
This is a compelling case. I actually rebalanced my portfolio after watching from SCHG. Then I went down the rabbit hole and did a 50/50 pairing of XLK and SCHD that seemed to have a hair better performance than this combo. Can’t really go wrong with either!
Thank you for watching and commenting. I think you made a great move! SCHG is solid, and I plan to make a video to discuss it soon. But XLK is amazing. And more than that, it has VERY little overlap with SCHD. That work very well together!
Great move. I think you’ll be happy long-term!
I've been on SCHD and SCHG as well. Nice combo.
SCHG and SCHD is a killer combo. Keep adding to that one for great long-term results. Thanks for the comment!
I just started my Roth IRA and I saw your incredible portfolio. I'm now thinking 50% SCHD & 50% VGT or QQQM for growth and dividends because of this video. My 401k contributions will just focus on the sp500 with matching.
Do you think that's a wise choice for the Roth IRA?
Thank you for the videos and I'm looking forward to more videos!
Hey Tommy, thanks for watching and commenting. I think that is a fantastic way to go! Getting that S&P 500 base holding from 401k is exactly what I’ve done for years.
As far as VGT or QQQM, I think either is great. You could do both (just keep the overall growth section the same) and be fine.
Thanks Jeff, I just found your channel the other night and I definitely enjoy the way you make you presentations. I have recently retired. I have a 401k to rollover. I am thinking a 50% SCHD, 30% VGT, 20% JEPI, 10% Money Market? The other question with it being a rollover do you still dollar cost average in or invest it in a lump sump? Thanks again
Hey Fred, thanks for the feedback and for the question.
I personally fully invest my rolled over 401ks right away. I figured I went from being fully invested for years right before the rollover, so may as well get back in.
Lump sum investing is 'usually' better than dollar cost averaging in for that situation. This makes sense because the market 'generally goes up' over the years. Of course, it comes with some risks of the market crashing right after.
If you're not comfortable getting it right back in the market, you can always invest a big chunk to start, and then aggressively dollar cost average the rest in each week over a fairly short timeframe.
You'll want time in the market, long-term, over timing the market.
@@JeffTeeples Thank you very much for your quick response and input it is greatly appreciated. Keep up the good work, thanks again.
The past 10 year outperformance of this 50/50 portfolio can be almost fully attributed to VGT having 40% of funds invested in apple and Microsoft which have outperformed (20% of total 50/50 portfolio vs around 10% for voo)
Thanks for watching and for the comment. They have been monsters to be sure. I still wouldn't choose to own them directly, though, because then you have to time things right a couple times.
Market cap weighted ETFs make the process smoother with consistent updates based on a changing market without us having to make decisions. For example, if one of the two fell, it would naturally be weighted down (just like the S&P 500 or Nasdaq-100 indexes). Past performance is great and all, but wouldn't want to be bound to specific tech companies.
I don't try to out think the market and try to outperform the market most of time in a long duration period you will lose that battle. It's a boring strategy and does not create for fun UA-cam videos but in reality you will more than likely be better off when you retire. I am long VOO about 90% of my portfolio. Good luck all I hope everyone makes money and I applaud everyone trying to plan for a better future for them and their heirs.
I think being long in VOO is a great idea. You will definitely win this simple money game. Thanks for watching and commenting.
Nice presentation - I am in the process of simplifying my IRAs - going with Vanguard funds for low cost and simplicity.
Thank you for the comment! I’m a Vanguard guy myself! Low cost and simplicity are the best for the long haul!
Hi Jeff! I switched VOO to SPLG because it is over 90% the same and a lot cheaper
Nice. Either one is fine, but I think Vanguard is the best personally. They are 98%+ the same. Both follow the same index, the S&P 500. So neither will ever be cheaper (assuming you mean from a value perspective, PE ratio). The 0.01% expense ratio difference is negligible.
For example, in the past 10 years, the total return (including expense ratio) are:
VOO: 224.61%
SPLG: 222.62%
This is due to more timing and randomness of following the index. I'll always roll Vanguard for the passively managed indexes if they are available. Long-time quality name in the space, reliable, and crazy high AUM for stability.
Thank you very much much for sharing and may I ask you that is it a good time to buy the vgt now with the price expensive and I really like this one or should I I wait for they correction the price
Thanks for the positive feedback & for the question. I'm not a believer in timing the market, however, I understand that sometimes the market is high or low, in general.
The way I approach this situation is to start dollar cost averaging in at all times. Then, make sure to stick to your target allocations moving forward. This will automatically buy the dip forever without timing the market.
For example, if you had $500 to invest each month, and you wanted a 50/50 mix of SCHD and VGT (or any two ETFs), you would buy $250 of each the first time.
If VGT crashed, and SCHD performed well, the next time you put in your $500 you would buy more VGT (to get it back up to its 50% target allocation).
M1 Finance is an awesome platform that does this perfectly for you. You just create your allocations and feed it money. It will automatically buy the dips to keep you at your target allocations. I have a referral link below if you want to open an account and get free $.
You can do the same process on any online broker, manually. It is what I do on E*Trade (I use ETRADE and M1 Finance) to keep my SCHD and VGT in balance. The last couple years I've been buying nothing but SCHD (to get it back to 50%).
I agree! I own both SCHD & VGT and added a specialized etf sector FSELX
Very nice! Thank you for watching and for the comment.
I just started the 30/30/30 VOO SCHD VGT 🤑
Where is the last 10%? Cash is trash?
Thanks for watching and commenting! Very nice! It is a great combo long-term. Market been a little shaky early this year, but that is the beauty of dollar cost averaging in.
Nice
@@DAVE-THA-PLUMBER5-10% cash in a couple 1 yr CD's 6 months apart getting 5%, almost like an emergency fund or cash in a money market getting like 5.3%. isn't necessarily 'trash.' It's kinda peace of mind and sleeping well money.
@Adrian0-tx9nb Thanks for the question Adrian. This is a tough one for me, because I'm a huge believer in the Nasdaq-100 index. So I love QQQ (well, QQQM for the same thing with a little lower expense ratio).
I slightly prefer VGT for 3 reasons:
1) SCHD is my dividend ETF, so I'm comfortable having a tech-only growth ETF with the great counter-balance of SCHD.
2) I am a huge believer in tech, in general, both historically and more important looking forward.
3) It has outperformed QQQ over the years.
Total returns:
VGT: 3Y is 34.88%, 5Y is 189.22%, 10Y 479.78%
QQQ: 3Y is 29.67%, 5Y is 159.74%, 10Y is 396.38%.
Granted, QQQ did take the win in 2023 at 55.91% to VGTs 54.14%.
They are both amazing, and even a mix of both for a growth section of a portfolio would be great. I slightly prefer VGT because I'm a huge tech guy, and I have the least tech based dividend ETF.
If I rolled with DGRO, DGRW, or VIG, I may use QQQM as my growth ETF.
I look at the big picture. I have an easier time suggesting QQQM to new investors because I feel it is more balanced overall than VGT.
I think both are great long-term with dollar cost averaging in.
Thanks for the shared insight - very informative! One question though If you'd have to start investing with, say $10,000, would you bolus-invest or spread your entra over a few months?
Thanks for watching and for the question. I personally would lump sum invest (all at once) the $10,000. This is assuming I am still working and dollar cost averaging in more money (beyond the $10,000) each month.
Thank you for the video! I am about to put 50% VGT and 50% in SCHD in my ROTH IRA. I will retire in 15 years. Your thoughts please? Thank you again
Hey Ivan. Thank you for watching and for the comment. I think that's a great idea. 15 years gives you plenty of time to ride out the ups and downs of the market. When you dollar cost average more money into the Roth IRA, you will be able to 'buy the comparative dip' by evening up the ETFs again.
@@JeffTeeplesThanks for the comments. I will do that
This is so true and so obvious! I recently moved a my savings into these two plus $SMH
I also played $SMH Jan 26’ calls at $400 strike. The asymmetrical return is massive if it just fractionally performs like it has been recently, for the next 18 months. Let’s go 🔥!!!
Man Pete, nice job with the SMH returns. It's funny, because I KNOW SMH is awesome, and it has been awesome for over a decade. I haven't been able to get myself to buy it because it is 25 semi-conductor companies only. I know VGT is tech heavy and dangerous, but I like getting a variety within the tech sector. Jokes on me, though, because SMH has been amazing (:
Good stuff Jeff - thanks. I had to roll a pension from a previous company to an IRA a few years back. It’s in active managed fund but I’ve been thinking about moving it to an ETF. Would you recommend a VGT/SCHD combo for a pretax fund?
Hey Mark, very nice! I think VGT / SCHD is a great mix in any account type. You could add a little VTI or VOO as well to get 'broad coverage of the market'.
I like to have about a third of each. This will also depend on a person's goals and situation, too.
Can you walk me through a scenario on how taxes are accounted for or is that already taken into account in your examples? Specifically with SCHD.
Thanks for this ! A Good proxy for this portfolio with a longer lookback that captures performance during the GFC, use a 50/50 mix of VGT and VIG.
Thanks Roger! I agree that VIG is a great ETF to hold long term as well!
The thing about VGT is that almost half the ETF is in 3 stocks. It's perhaps only a mild exaggeration to say that if I wanted to be that concentrated, I could just skip the expense ratio and just hold those stocks instead of the ETF. QQQM is perhaps a more diversified pairing to SCHD if I wanted tech growth. Or, perhaps SCHD/SCHG if we'd prefer to diversity our growth further.
I agree that QQQM and SCHG are more diversified growth ETFs that also play very nicely with SCHD. Thanks for watching and commenting.
Can you make a video with VGT, QQQM, & SCHD together vs. VOO? Thanks
Thank you for dropping a comment and for the idea. I will be making this video in a couple weeks. It's like you read my mind.
If FTEC is cheaper how come we don’t do 50% of that and the other 50% SCHD? Also why is ftec cheaper in the first place? And would you consider adding 25% VXUS 25% SCHD and 50% VGT to include international in the mix for even more diversification ? To give an even bigger parachute if VGT drops heavily
Thanks for the questions. FTEC is a solid replacement for VGT. They track the same index. I like Vanguard personally.
VXUS could make a run in the future. I’m always watching it. So far, it would have cost me 3-4 hundred thousand for a 25% allocation. I take the wait and see approach with it. I’ll likely be a little late to the party, and I’m okay with that.
Hi Jeff, I watched your "Modern 3 Fund Portfolio That Beats The Market Every Year" and compared it with this video and in the Portfolio Income section, how come the 3 Fund Portfolio has a higher income from the chart than the this video? I know that in the 3 Fund Portfolio, there's just VOO added but it shouldn't be that far off right? I'm going to building a portfolio with 20 years out and trying to see if the 3 Fund Portfolio is better than the SCHD and VGT portfolio that will build the most income in 20 years. Or just stick with SCHD and VGT that will give the most income? Thanks in advance.
Thank you for watching and for this comment. It is a great question.
Having 34% in VOO creates quite a drag on cash-flow compared to VGT + SCHD. VOO has historically been a lower yield & lower dividend growth rate compared to the mix. Compounded over time, that 'little difference' makes a 'huge difference' on the income stream.
However, I still love VOO because it has been rock solid for over 100 years. If 90% of the 'experts' fall short of it over long periods of time, I consider it a great cornerstone to add to a portfolio. So far in 2024 VOO is outperforming VGT + SCHD on total return. I love all 3 holdings, but VOO will definitely drag income streams compared to the mix of only 2.
Very cool analysis! Thanks. Would love to see the same analysis using 50% VFIAX and 50% QQQM. Cheers 🍻
Thanks Scott! Much appreciated.
50% QQQM / 50% VFIAX is amazing, but doesn’t have the downside protection without a quality dividend ETF.
Much like VGT / VOO, it will beat VGT / SCHD in the last 10 years. However, it must be held in the hard times (don’t sell low) or major compounded gains will be erased. When it does crash, buy buy buy! (:
For a young person, very solid set up. It’s 2/3rds of my modern portfolio (QQQM is my recommended growth if VGT is too much tech, and VFIAX = VOO). I love that mix!
I like FTEC and SCHD. FTEC is the same as VGT but low price point and lower managing fee. (FTEC .08 and VGT .1)
Thanks for the comment. Absolutely, you have yourself a killer combo there!
I build on my Roth SPLG(98% V00), SCHD+DGRO, and for growth SOXQ(88% SOXX), a small portion IBIT. I am 42 y/o. What ETF can or could be changed, and what % in the portfolio should be. Also want to make another portfolio or copy for my HSA account.
Hey Russell. Thanks for the comment and the question. I like your mix a lot. You have the dividend and cornerstone (SPLG) set.
Your growth of SOXQ and IBIT is great, but VERY 'growth-like' lol. I'm not saying you need to make a change at all, but I may sprinkle in SCHG or QQQM to the growth just to get a quality 'multi-sector' growth position.
If you stay the course, you'll likely be happy long-term. SOXQ will give you a heck of a ride, though. Don't panic sell when things hit the fan. Keep dollar cost averaging in.
Nice analysis BUT to be more compelling you should also show how the 50-50 portfolio performs against VGT alone. Total returns may well be higher over the 10 year span with just VGT but you could show larger losses too in down years (i.e., higher volatility and risk).
Thank you for watching and for the feedback. It would be interesting to compare growth to dividend ETFs over the past 10 years. It would definitely show it's been a crazy bull market (the meh growth CRUSH the best dividend ETFs by far). Seeing the ups and downs would be helpful though (to show how SCHD stabilizes VGT in bad years).
Very interesting, wife and are 37 currently, portfolio is about 75% S&P 500 in 401K, reallocating remaining 25% funds to Roth IRA via backdoor conversion and taxable brokerage, then we have on going Roth IRA max and $3500 per month to put into taxable brokerage.
I was going to be going SMHX + AVUV between Taxable Brokerage and Roth IRA.
Anyone care to offer compelling argument for VGT + SCHD instead?
I think you and your wife have a very nice strategy. I don't have any compelling arguments against what you are doing. Staying the course with that mix should do very well over many years / decades.
@@JeffTeeples thanks, my only thought potentially was on saving a bit on LTCG from selling off SMHX towards retirement vs just keeping VGT for the long haul, as I don't feel like SMHX will be an inevitable 30 year+ long term stability play, but 10-15 years, don't see how it won't be very solid growth.
Thank you for your video! I have VOO, XLK, and SCHG.
Thanks for sharing. That will do so well for you over the years with a consistent dollar cost averaging in strategy.
Any plans to mix in a quality dividend ETF or two when you get closer to retirement?
@@JeffTeeples Yes sir! Thanks for your response. I have been doing dollar cost averaging every month since COVID May 2020.
I’m still doing research and will find a dividend etf to add to my portfolio.
That’s awesome! And it is no rush at all if you still have many years until you retire. Take your time researching. The wealthiest investors are the ones that research the most and make the least amount of moves.
What is the best brokerage acct to use if I want to invest in VGT/SCHD in a UTMA account?
Thank you for watching and for the great question. I have a custodial account in E*Trade that works well for me (and my Nephew). It was easy to set up and get funded for him.
I haven't tried it in M1 Finance.
The other online broker that people seem to love is Fidelity. I'm not a fan of the messy look of Fidelity, personally, but it is a platform that has everything available. It is a great broker if you only want one place to do everything.
@@JeffTeeplesThanks! Keep up the good work!
I’m in SCHD, XLK, and SWPPX. Similar mix and great returns
That is a fantastic mix Seth. It has produced amazing results. Thanks for sharing.
I started a similar 3 ETF experiment in my IRA 14 months ago with 33:33:33%, using VOO: FTEC: SCHD. With no rebalancing, FTEC is sitting at +51%, VOO @ +21.5% and SCHD only +1.7%. VGT ~FTEC in performance and a little lower ER. Could have skipped VOO and made it a 2 fund portfolio. +25% overall.
Very nice Karl! It’s amazing how much better growth ETFs have performed during this crazy bull run.
It’s so easy to get a portfolio out of balance over many years.
I love VGT, FTEC, or XLK for 100% tech coverage.
Love the Content! Was curious on your opinion of adding a bit of Real Estate to this portfolio as currently there is none. If I wanted to add say a USRT at a 10% weighting, would you deduct an even 5% from each SCHD and VGT? Thanks for the continuous educational Videos 🙏🏻
Hey Ted, I appreciate the kind words about the channel.
I think adding real estate, and / or international exposure to a portfolio is a fine idea.
I would probably replace SCHD with the real estate. They are 'more like each other'.
Granted, the mix will be age dependent in general. Someone retired or close to might already have 80% SCHD, or vise versa for someone that is 21 years old.
But I think real estate fits into the portfolio to replace a dividend ETF more than a growth ETF. International would probably replace a touch of both (or VGT).
There is not a perfect allocation for a one size fits all plan. It will depend on your age, wealth, work situation, risk tolerance, and goals. But having growth ETFs, Dividend ETFs, cornerstone ETFs (VOO or VTI), International ETFs, and or real estate isn't a bad idea for overall portfolio balance.
I personally do not have real estate, and I do this from a 50 to 100 year perspective. Sometimes it looks bad, or good, real time depending on the current market situation.
I am always watching international ETFs. Not having one has made me 6 figures of opportunity cost in my portfolio, however, it could change any time, and I will likely be late to the party. Much like Jack Bogle, I'm okay with 'that' risk. I will never stubbornly say NEVER, because I don't think that is smart.
Would vgt and schd be ok in a taxable account aswell as a Roth IRA? To enjoy some of the benefits currently. I know there would be tax implications but curious if they are enough to be a deterrent in going this route?
Hey Logan, thanks for the question. You bet. They are both great holdings for a taxable account. The dividends will be taxed as 'qualified dividends' which means you will pay less taxes on them, and they do NOT add to your taxable income (they don't play into your Federal tax rate at all, they are considered after all the 'normal tax stuff' each year).
Great video! How does this look if you went back 15 years, and also 20 years within the portfolio visualizer?
Hey Brady. I can't go back any further with SCHD specifically. It hasn't been around long enough.
But I do have some videos coming in the near future that will go way further back to look more into asset classes. For example, large cap US vs small cap US vs international stocks.
I'll continue the SCHD+VGT back tests for many years to come as we accumulate more data.
Great video! Thank you so much. Would you say SCHD is better than SCHG? It seems like SCHG recently performs better. Just wondering your thoughts. Thank you.
Hey Jane. I think SCHG and SCHD are both great. They are on completely different sides of the growth / value equation. SCHG should be compared to other growth funds like QQQM, VUG, and VGT.
Growth (SCHG) has smashed the performance of value (SCHD) in the past few years (really for a decade+ now). But I still think having some value in the portfolio is always a great idea in all markets. We never know then the market will rotate towards value again.
@@JeffTeeples Thank you so much Jeff. Really appreciate your advice. Great analysis. I really enjoy your videos! Do you buy any individual stocks like Nvidia? just wondering your thoughts about that.
I do buy individual stocks. I'm ramping it up more as time goes on. I don't hold Nvidia specifically, but my results have been pretty solid so far. I started on 4/20/2023, and the portfolio is up 64.16% vs the markets 36.9%. Off to a decent start, but who knows what the future will hold.
@@JeffTeeples That's awesome! Great job. Good for you :) That's true. Thank you for sharing! What percentage of S&P 500 or VOO would you recommend for me to have in my portfolio if I am in my 30's? I am hoping to retire early and what percentage of VGT and SCHD would you recommend? Thank you so much!
VOO is nice because it is well balanced in and of itself. You can go anywhere from 1% to 100% of your portfolio in VOO and you'll do great.
I like to use SCHD to counterbalance VGT a bit. When you combine them together, they make a 'similar' mix to the VOO. Not as far as the exact holdings, but most of the key performance indictors like PE ratio, dividend, returns, standard deviation, etc.
SCHD + VGT is superior to VOO on dividend growth and has a higher yield too. The total returns have faired well too.
I would say add 'roughly' the same amount of VGT and SCHD to the portfolio. You are young, so perhaps having a little extra VGT or QQQM compared to SCHD is fine. But I wouldn't get too out of balance.
I prefer a third of each, but I'm also in my 40's (:
Nice video Jeff, thanks for sharing. My portfolio is SCHD, SCHG, VGT, ARKK and QYLD 20% each one. I'm also a non-US citizen and the 30% on dividend taxes kills me. So, I'm currently thinking in getting rid of my positions in SCHD and QYLD to only invest in growth ETFs while still in my 30s, and once I reach 50 years old go back to 50% SCHD and 50% VGT/SCHG. Wha would you do? Thanks in advance!
Thank you for watching and for the comment.
I personally would drop ARKK. I actually just made a video about it, but it will not be dropping for a couple weeks. I don't like actively managed funds, and ARKK has been brutal.
A total return of -63.59% in the last 3 years (as of today). In that same time, VGT is up 37% and QQQ is up 32%. That wasn't a typo, negative 64%.
Total return in the last 5 years ARKK is 24% to VGT 191% and QQQ 161%. But it's not just about past performance. It's about consistency.
Also, even if she does match the market over the next few years, you still lose 0.75% off the top, which will be hundreds of thousands over the years due to the compound effect of the expense ratio.
If you were rolling without dividend ETFs (which I think is fine in your 30's, I did the same) I would probably do something like this:
QQQM 33.3% / VOO 33.3%. / VGT 33.3%
VGT is great, but it is 100% tech. If it crashes way down, just keep buying. I've lost 6 figures on it, but my overall cost average is ~$287
Then the other two are the markets that have nice history and solid balance. VOO for S&P 500 as a stabilizer (without a dividend ETF) and QQQM as a quality growth ETF to pair with VGT.
Just know, you will lose a TON of money at times. If you don't let that deter you, and you keep buying, you will very likely be wealthy in 20 years.
SCHG is solid (going to make a video on it soon), but QQQM and VGT have destroyed it over all time periods.
If you REALLY have an iron stomach, 50% of VGT and QQQM would be nice (scary, but nice). Just delete the SELL button from your online broker (:
how often should we rebalance. or do you suggest to put both on drip and let it ride
Hey Steve. I don't think there is a 'right answer' to this one. A lot of smart people will say anywhere from monthly to never.
For me, I like to 'rebalance' with my new contributions as much as possible. Buy to the target allocations to always get the relative dip within the portfolio. I think once a year is a good rule to officially rebalance. It will give time to let the winners run and to keep buying more of the losers.
I personally don't rebalance. At least, I haven't 'officially' done it yet. But I left my six figure job to start this channel, so it my be necessary soon (: I used to have enough 'new money' coming in to keep it somewhat balanced in general.
@@JeffTeeples i may take the once or twice a year approach. i plan to deploy this in one of my long term accounts but with a schg/schd combo. thanks for the strategy idea
“Past performance is no guarantee of future results “.
This statement is included in every fund’s statement.
Past performance is no ***GUARANTEE*** of future results.
-CYA
Hello! I have a question for you. I currently have VGT and VUG…I am considering replacing my VUG with SCHD in my retirement account. Do you hold SCHD in your personal brokerage or retirement accounts instead?
Hi Tiffany! Thanks for the question. I hold SCHD in my taxable account and my retirement accounts. I think it's great in either (because the dividends are qualified, which means they are taxed at a special tax rate and they do NOT add income to your tax return. They won't push you to a higher tax bracket).
SCHD is slightly nicer in a retirement account because the dividends will not be taxed at all (until the money is removed if in a traditional).
The beauty is, you can sell VUG in a retirement account and buy SCHD right away with zero tax implications. In a taxable account, you want to make sure you've held it for more than a year, or that it is at an unrealized loss before you rebalance. But your retirement account is good to go on selling and buying any time.
If you have 401k w/ Fidelity, is it best to have Fidelity equivalents for VGT/SCHD to go along with FXAIX and maybe a FXNAX? Just started Roth IRA the other day, and able to add max for 2023 and 2024 for wife and I.
Thanks for the question. You can actually buy SCHD and VGT in Fidelity fee free. They don’t charge extra for ETFs, it is only other mutual funds. You can use FTEC instead of VGT, either is great.
Thanks for getting me on the VGT train sir!
Thanks for commenting. Allllllll aboard.
Make sure you hold on to something because it can be a bumpy ride! When it dives down, I stay the course and dollar cost average in!
10 years is impressive but still a fairly short time period. How has it done over 30 years (overall not per year) or so?
I agree with this one. It has done very well over 40 years, however, I have to get creative with the back tests because the specific ETFs aren't around.
But VGT is competitive with QQQM over the past 20 years, and the Nasdaq-100 has dominated the S&P 500 over the past 40 years (even including the major recessions) by a solid amount.
More years in the future will unfold the story. I like the mix for now, and I'm excited to see what happens moving forward.
Your strategy will work well as long as tech continues to outperform. If there is a prolonged period of tech underperformance it's likely that a 50% weighting in SCHD will not be enough to have you outperform the market, even though it has been enough to shield you in temporary sell-offs in tech during your holding period. The bottom line is you are investing and I think you are going to do well in the future.
Hi Aaron. Thank you for the detailed feedback. I agree with your assessment. My ETF portfolio is a third each of VGT / VOO / SCHD. This video separated out that piece to show the 1-2 punch of SCHD + VGT, but I still am a huge believer in 'the market' in general. I'm also adding some QQQM to the growth section in the future (spoiler alert for my video coming this week). Thanks for taking the time to provide feedback. I would love to have you along for the ride if you're interested (portfolio updates every month with exact holdings).
I’ve been doing a lot of ETF combinations on portfolio visualizer. So far only 50/50 SCHD/XLK beats 50/50 SCHD/VGT portfolio. And it only beats by about a .2-.4% wow
Thanks for the comment David! XLK is a beast. It and VGT have an 82% weighted overlap.
With the higher concentration of funds, XLK has been better in the last 10 years. It has 67 holdings compared to VGTs 315.
They are basically tied since VGTs inception. Can’t go wrong either way.
Any thoughts on why not tech focused JEPQ vs VGT that also is giving a 12% on top dividend through a portion in covered calls?
Thanks for the question. Also, #DogeArmy!!! (I have a small holding).
JEPQ is great for cash flow purposes. For a long-term, buy and hold total return centric solution, I prefer VGT or QQQM to JEPQ. I think they are all great investments!
What about FTEC & SCHD?
Some think FTEC is better than VGT.
FTEC + SCHD is a great combo. FTEC follows the exact same index as VGT, so your 'mix' will be identical.
Hello I am 20 years old with very high risk. I’m not thinking of adding any dividend etf any time soon. I have 40% in VGT 40% in QQQM and 20% in VOO what do you think of this portfolio? Thank you!
Hey Alexander. I don't think the portfolio is bad, but it is heavy in growth stocks by weight. You will likely see some major downside when the 'next big thing' hits. Perhaps down 75% vs 35% of a balanced mix, or something like that.
However, if you stay the course and NEVER panic sell (say, for example, the next dot com like crash), and remain a buyer, you will likely be 'stupid rich' when we zoom out 30 years. Remember, you will have to keep buying when you $1,000,000 portfolio is worth $250,000. It sounds easy in theory, but few can do it. I am among the few, I never, under any circumstances, panic sell (I sell only to move stuff around in general, small changes).
This portfolio will take a strong stomach and major patience, but could pay off disproportionately well long-term.
how about SCHD + TQQQ combination??! I wonder your povo f leveraged ETF.
I'm not a fan of leveraged ETFs in general, personally. It can backtest well during bull markets, but is way too risky for my taste. I prefer QQQM if wanting exposure to the Nasdaq-100.
Love the suggestions, although I couldn't find the correct ETFs on 212, does that mean they don't hold them, or they go by a different name? there are some confusing overlaps with the tickers when I search. Thanks in advance
Thank you for the kind words. I have never used Trading 212 before, but I'm shocked they don't have the ETFs mentioned. SCHD and VGT are pretty big ETFs, and I've never heard of them being exclusive to brokers. Everything I've used has access to both.
If it has FTEC, that can replace VGT. Or XLK (is somewhat close).
SCHD is fairly unique. You could try DGRO as a replacement. VYM if you want to get closer to the yield of SCHD (but sacrifice dividend growth).
@@JeffTeeples thanks for the reply. I will take a look in case it's just me being daft. I know currently the sp500 that I use with them is that VUAG, but again there seem to be so many variations for the s&p500 that it's overwhelming and hard to know the difference between them all lol
What do you think about 50% of SPLG and 50% of SCHG. Can you make a VDEO
I'm a fan of SCHG and SPLG. I think a 50/50 mix would do well. It would be too heavy in growth for my blood. I like something that is a nice mix between growth (SCHG, VGT, QQQM) and value (SCHD). The combination of the growth ETF + SCHD will have a similar PE ratio as SPLG.
SCHD is ~16
VOO is ~24
VGT is ~32
Combining a growth ETF with a cornerstone will do well over time, but it will struggle when the market turns back to value.
Shoot, in the past decade, VOO + VGT outperformed SCHD + VGT, but I still like more value mixed in.
Can you confirm if this 50/50 combination is better than 50% SCHD and 50% SCHG?
Oh yes, by a decent margin. I don't remember the numbers I used in this video, but I think it was 2014 through 2023. Here is what it looks like if we start with $10,000 and contribute $1,000 per month.
Ending amount:
VGT/SCHD: $351,145
SCHG/SCHD: $306,873
10-Year annualized returns:
VGT/SCHD: 15.77%
SCHG/SCHD: 13.39%
VGT has been better by a wide margin in the last 10 years, and also by even more since SCHGs inception.
What is your opinion on 50% FTEC 50% VGT...it does beat the S&P 500 every year and only loses to VGT on one down year? I only ask because it costs 20% less at 0.08.
I think FTEC is a fine replacement for VGT. They literally use the exact same index.
Both pair very nicely with SCHD.
@@JeffTeeples Thanks, I appreciate your feedback and nice content! Take it easy
Hi Jeff, first time here, just subbed and read all 200 comments and replies.I'm retired and coming out of a 50% cash, 50% vym and looking to rebalance to 30% vgt, 30% voo,30% vym and10% cash. My concern is the overlap of vym and voo.I seem to be doing ok on Social Security alone , all bills paid and in 4 years will be paying rmd's, and am questioning the logic of collecting dividends. Any help on this rebalance would be much appreciated!
Hey Mark, thanks for watching & subscribing. I appreciate it!
VOO tends to have a lot of overlap with most popular ETFs, because VOO has 'a bit of everything' by holding the 500 largest US companies. It holds 86% of ALL stocks in the US. I wouldn't worry too much about the overlap with VOO and VYM because of the passively managed nature that both use. VYM is grabbing high yielding companies and VOO grabs the 500 companies based on market cap. Overlap is inevitable there.
However, I really would strongly consider getting SCHD to take the place of VYM, potentially. Or at least as a slice of that 30% (the dividend ETFs). You could do a 50/50 mix of SCHD and VYM within that 30% (so 15% of each overall).
I'm not a fan of 'telling people what to do' because there are so many great investments. If you had DGRO or VIG, I wouldn't recommend it because you're likely going for dividend growth and price growth as well.
However, as solid as VYM is, it really falls short across the board to SCHD, even with the rough past year for SCHD.
Here are some of the key metrics:
1) They both pay qualified dividends (taxed as favorably as possible, 0% to 15%, depending on where you fall on the tax tables (up to 20% for people that make a LOT of money, but uncommon in retirement). Taxes don't get cheaper than this, it matches the long-term capital gains tax rate. Favorable to ordinary income (job wages, social security, pension payments, etc).
2) SCHD only has an 11% overlap with VOO, VYM has a 32% overlap
3) SCHD only has a 7% overlap with VGT, VYM is at 10%
4) SCHD yields 3.45% to VYMs 2.44%
5) SCHD grows its dividends by 13.05% per year over the past 5 years, and 11.39% over the past 10 years. VYM has a 5y growth of 0.83%, and a 10 year growth of 4.67%.
6) SCHD 5Y total return is 81.94%, and 10Y total return is 201.23%. VYM is 59.51% and 158.32%, respectively.
Again, they are both solid, but I think SCHD is way better for that portfolio mix from pretty much any angle.
I'm going to make a video soon about qualified dividends held in taxable accounts vs growth. The pros and cons of each.
Thanks for the detailed reply Jeff!
@@JeffTeeples
Great rundown. :) @@JeffTeeples
What are your thoughts on bitcoin etf like ibit
And thoughts on semiconductor etf like
Soxx
Hey Jeff, thanks for the question. SOXX and SMH have been amazing, but I can't get myself to niche down that much, personally. I do roll with VGT, which is 100% tech, but it is fairly well diversified 'within tech'. But as far as the results are concerned, the semiconductor ETFs have been amazing.
I am mixed on Bitcoin in general, but I do like IBIT a lot as an investment. It's a lot to type out the pros and cons here, but check out this video for more details.
ua-cam.com/video/3gtladwRgn0/v-deo.htmlsi=ef6uQc6N-swMGO7d
thanks for this great video and the graphical explanations, now where were you 10 years ago =p that's when i needed it the most :) Keep up the great videos!
Thank you for watching & for the comment.
The beauty is, 10 years ago was identical. Dollar cost averaging into these (or any well balanced) portfolio allocations uses the exact same process with $1,000 or $10,000,000,000.
In 10 years from now, I will be dollar cost averaging into a MUCH bigger (hopefully) balanced portfolio with no additional 'professional advice' needed.
The one rule, never sell. Unless life MAKES you sell, never sell because you think 'things might get bad soon'. That is where the cash on the side will come in. If things crash, you can buy more (:
@JeffTeeples thanks for taking time to answer this in detail. I really apperciate it. Going to go with dca for sure. New sub here
@@RWAquariumPages I appreciate it! I will keep creating videos that I think will be valuable for my fellow long-term investors.
VUG:
VOOG:
VGT:
XLK: , GOOD COMBO ? Thank you
Thanks for watching and leaving a comment Sky Tech. And an even bigger thank you for going the extra mile as a channel member. I appreciate it.
I think VUG & VOOG are great multi-sector growth ETFs. I slightly prefer SCHG or QQQM to them, but we are splitting hairs.
VGT and XLK are both awesome tech focused ETFs. My favorite is VGT (I like pulling in the small and mid size companies), but they are 'basically' the same.
You do have 100% 'growth ETFs' there. It is okay as long as you have many years / decades to continue to invest. When the market crashes, they will crash harder. That is fine if you remain a buyer and don't panic sell during the drop. You will be buying more shares per dollar as everyone around you runs.
I have 40% SCHD 40% VGT and 20% MSCI ACWI do you think it makes sense to have an all world ETF (as it‘s 70% US anyways)?
This is a tough one without a 'right answer'. In my opinion, which aligns with the late Jack Bogle himself (the grandfather of index investing), I don't invest outside the US stock market in our current situation. It has made a $400k+ difference for me over the years. BUT... I watch it constantly and will dive in, likely a little too late, when I feel it makes sense.
Many like doing it now and always to be ready for the changing times. I think the opportunity cost is too great, but I understand the viewpoint, and do not think it is 'wrong'. They would argue, perhaps correctly, that I will 'miss the boat'.
Short answer, it depends on the person (:
Does the analysis include rebalancing back to 50/50 annually?
Thanks for the question. It does. And sometimes 'letting the winners run' is a better way to go. However, I've always been a fan of sticking to my allocations.
I've been able to do this, over the years, without doing 'official rebalancing', because I buy my struggling positions (SCHD lately) back to the allocation with new money.
But yes, I use the rebalance annually for the information in this video.
I've got 25% each in SCHD, VGT, VOO and JEPQ.
Thanks for watching and commenting Gian! That is a very nice portfolio. I have to say that, because those are my exact holdings (:
I am lighter on JEPQ, and I have it in my greedy cash section, but the other 3 I have a third of each.
Keep dollar cost averaging into that thing for years and you’ll build some nice wealth!
Whats funds you recommend in a brokerage account vs a 401k for long term holding?
Thanks for the question. For a brokerage account I like VGT and QQQM for growth ETFs, SCHD for dividends, and VOO or VTI for a cornerstone holding.
For 401k, I think 'usually' a low-cost S&P 500 fund is the best option to DCA into long-term. If unavailable, the low-cost target date funds aren't terrible. 401k are usually limited, so the answer is 'it depends what it has available'.
Jeff thanks for your reply. I am self employed and have my ROTH, SEP and brokerage accounts with Schwab. So I have access to most of the funds in the market.
Nice work, thanks for sharing.
Thank you for watching. I appreciate you dropping a comment.
Great video. Substitute DGRW for SCHD and see the results. More diversified fund, too. Higher return with a little less downside protection. Great return either way. Agree that VOO as a third fund in equal parts is the way to go. I don’t disregard the Oracle either.
Thanks for the feedback Dustin!
DGRW will definitely outperform SCHD over 'most' time periods. It is a hybrid fund, that I think is quite good! But replacing SCHD in a portfolio is apples to oranges.
DGRW has a 42% overlap with VGT as opposed to SCHD's 7%. The highs will be higher, and the lows will be lower.
I think SCHD is a much better compliment to VGT. If I was adding DGRW, I would consider it VOO. Or I would reduce VGT and SCHD equally to make room for DGRW.
However, DGRW doesn't perform as well as 50% of VGT & SCHD. I think DGRW is an awesome jack of all trades fund. I made a video about it recently. Definitely not a bad choice for any portfolio. There are so many great options.
This is why I think DGRW makes a competitive cornerstone:
Total returns:
DGRW: 1Y - 18.6%, 3Y 38.4%, 5Y 99.9%, 10Y 210.9%
VOO: 1Y - 25.3%, 3Y 32%, 5Y 100.4%, 10Y 206.6%
DGRW yields 1.76% dividends compared to 3.48% of SCHD. It's 5 year dividend growth rate is 6.31% compared to SCHD 13.05%
Now VOO is very similar with a 1.48% yield and 6.06% 5 year dividend growth rate.
What's the backtest on other previous years for vgt and schd? Like 2000 or 2008? Or what's the backtest over a 20, 30, 50 year period?
Thank you for the question. Unfortunately, I can’t pull that information.
However, this is why I still buy a big chunk of VOO. I love the 50/50, and it has dominated the market for 10 years in a row. However, it’s been a tech bull run (really for the past 30 years, even including dot com) lately.
I think it will continue, BUT, I don’t know that for sure. And I KNOW VOO has done well for over 100 years.
I like to stay open-minded and up-to-date. I’ll be the first to share when something changes.
Hi Jeff, greetings from Canada. As a Canadian I invest in ETF's traded in the TSX mostly to avoid FX fees and currency exchange. Currently holding Vanguard's VDY (Canadian high dividends), VUN (USA Total Market) VIU (Developed markets ex NA) and VGG (US Div Appreciation). I dont really see anything similar to VGT and SCHD in the Canadian market that I could use to emulate your portfolio. I wonder if you could help me and give your opinion on this.
Thank you for the comment & question Danilo. I'm sorry to say that I do not know a lot about the Canadian investment options. I don't want to provide you with a quick answer than could be misleading. This is something I plan to study up on so I can be more helpful in the future.
Thanks for replying.
I think you can’t go wrong with QQQM or VGT. Technology isn’t going anywhere anytime soon. Technology always changes.
I'm with you on that one. I don't see technology going anywhere. It will evolve and the 'next thing' (like AI now) will emerge. Owning the basket of tech is a great way to go.
How often do you rebalance your 50/50 SCHD VGT portfolio?
Thanks for the question. Historically I would 'rebalance real-time' as I dollar cost averaged into the underweight position with new dollars. I no longer have high income from my job, so I may need to rebalance annually at this point (in addition to DCA in whatever I have during the year to the underweight holding).
Great video and analysis as always. I started with a 50/50 split between VGT and SCHD. Only recently have o started to build up the cornerstone VOO position. I have pondered this *a lot* and think I will go with a split of 40% VGT, 40% SCHD and 20% VOO.
What kills me is the 30% tax I need to pay on dividends as a non us citizen… I am 44 now so perhaps I should allocate 30% to SCHD and 30% to VOO for the next 5 years. Can’t decide. My situation slightly different. What would you do? Thanks Michael.
Thanks for the comment Michael! Always look forward to hearing from you.
I think both of your ideas are great (from an allocation standpoint). I would likely favor the second allocation more because of your tax situation, assuming you have at least 5 to 10 years of working (or earning) ahead of you. I say that because having more money to DCA in will help when VGT takes big dives (and it will!) over the years. If you stay the course, it has historically always shot UP way more than DOWN, long-term.
Then in retirement you can strategize a gradual move to more dividends as the years go by.
👍
As you channel scales you going to have a full time job providing so many personalised well crafted and thoughtful replies. Keep doing what you doing!
@@MichaelRosch-q6p Haha, that’s true Michael. I want to always get back to each comment. I may eventually have to scale back a little bit!
But, the community is my favorite part of this! I’m here to help others as much as possible.
What suggestions would you give for taxable account ETF?
Thanks for watching and for the question. Any ETF I recommend will work well in a taxable account. That is primarily because I only invest in ETFs that pay qualified dividends.
This means the dividends are taxed at the same rate as when you sell a holding for a long-term capital gain.
SCHD, VGT, XLK, QQQM, DGRO, DGRW, VOO, VTI (I'm just going off the top of my head) all fall in this category.
Now, if you want to minimize qualified dividends over the years, you'll want the higher yielding ETFs like SCHD and VYM in your retirement accounts, and lower growth based ETFs like VGT, QQQM, or even VOO/VTI in your taxable account.
I ironically do it backwards for tax reasons and cash flow. I plan to make more videos in the future discussing the tax implications of long-term holding. Many people think that reinvested dividends are basically taxed twice (as qualified dividends when paid, which is true, and at more future gains, which is false).
When you reinvest dividends, your gains are zero and will never be taxed for the transaction in the future (outside of the qualified dividend tax that year).
For example, let's say you have $2,000 of an ETF, with a cost basis of $1,500, and it pays you $100 in dividends. You have a unrealized gain of $500 that you will owe long-term capital gains tax on when you sell.
You will pay the qualified dividends that tax year at the long-term capital gain tax rate (best tax that exists). If you reinvest the dividends to buy more of the ETF, you now have $2,100 at a $1,600 cost basis. You still carry a $500 gain that will be taxed some day when you sell.
Your value, and your cost, raised by $100 each, which made for an unrealized gain of $0 for that reinvestment. You will never be taxed for 'that' again if that makes sense. You are only on the hook for $500 (of course, please any future gains on everything).
If the company didn't pay dividends, but increased by $100 more (price growth instead of dividend), you would be carrying a $600 gain to be taxed some day.
Edit: I should specify, I have recommended JEPI & JEPQ, which is (mostly) not taxed at the favorable tax rate. I thought I should point that out.
Thank you
New sub here, great videos!
Im very new to the ETF world or investing in anything other than my govt 457 ROTH. I have a few questions, maybe you can help -
I just learned I can manage my own ROTH 457 through a PCRA Schwab account and want to purchase SCHD and VGT. I want to invest the maximum ($23,000 a year) for 15-20 years and retire early at 50 or 55.
1) what percentage of each would you invest into if you want an extra source of income through dividends at retirement age?
2) Are these 2 ETFS the only 2 to buy from here to retirement? Should I throw another in the mix? Thanks for your help!
Thanks for the new subscription & for watching!
1) This will depend on your current age, years remaining of work, and your goals.
For me, I'm in my early 40's, and I like an equal mix of VOO / SCHD / VGT. SCHD/VGT because they are great compliments to one another and they beat the market. VOO (this is 'the market' that everyone is trying to beat, the 500 largest companies in the US) because it has an amazing 100+ year track record and we never know what the future holds.
In my early 20's, it would look something more like 50% VGT / 35% VOO / 15% SCHD.
In retirement it could look more like 80% SCHD / 10% VOO / 10% VGT.
2) There are so many great ETFs for what I consider 3 main categories.
Growth ETFs are things like VGT / XLK / SCHG / VUG / QQQM.
My favorite is VGT. QQQM is also awesome, and a bit more diversified. QQQ (QQQM is the same with lower expense ratio) is somewhat like the 'S&P 500 index' in the growth world. It's 100 of the largest companies from the Nasdaq index. Very tech heavy, but not as much as VGT.
Cornerstone ETFs are things like VOO and VTI. This gives you a slice of everything. Sold dividend companies, growth companies, and anything in between.
Dividend ETFs are things like SCHD / VYM. These hold more companies that focus on dividend payments, and are generally less volatile with the crazy market swings.
There are a TON of quality options in each category. The main concern is that you don't have 100% of any one 'category' (all growth, or all dividend). The only type that 100% is okay is the cornerstone, something like VOO or VTI.
SCHD / VGT is an awesome combo because they are VERY different. So you have good coverage. Can't go wrong with that 1-2 punch.
@JeffTeeples Thanks so much for the quality reply!
I'm in my mid 30s and I plan on retiring at either 50 or 55. I only have about 10k saved up (besides pension) and want to put all that into a mix of ETFs. I will start overdriving my savings and doing the max contribution of 23k a year. My retirement goals are living off of my pension and hopefully supplementing that with some type of dividend return. With those facts, how would you invest into ETFs and at what percentage?
It is hard to answer something like this without knowing all the details. But from what I gather, you have ~20 years to invest, and you have enough income to fully max a 401k each year. This is fantastic!
It still depends on your risk tolerance. By default, I would throw something like 40% VGT, 35% VOO, 25% SCHD.
But if you want to get aggressive, you could go 50% VGT (knowing you have a lot of time to recover from the big dips that will happen), 35% VOO and 15% SCHD.
As you get closer to retirement, and in retirement, you'll likely want to lean to more and more SCHD for the dividends.
With how much time you have, any mix will work. I would lean as much to VGT (or QQQM if that is your growth ETF) as possible in the early years if you are investing every month.
I've lost 6 figures in my portfolio before as I was heavy in VGT until recently.
But zoom out and VGT is up nearly 500% over the past 10 years, while SCHD total returns (including dividends) is under 200% in that time-frame. The market, VOO is up just over 200%.
VGT 'usually wins' the longer you dollar cost average in, but everyone needs balance. We never know when the next dot com will devastate VGT. When it does? BUY BUY BUY! (:
I'd like to challenge you on the growth prospect of VGT. 53% of VGT is in MSFT, AAPL, NVDA & AVGO. These 4 experienced phenomenal growth over the last decade and that's the reason by VGT did so well. While I still have my faith in MSFT, can the other 3 keep up with the same level of growth in the coming decade? If not, the VGT won't grow like it did.
Thanks for watching and commenting! This has been a concern by many about VGT for the past decade (and really longer than that).
If those 3 companies didn’t do as well, they would scale down within VGT (and QQQ as well) with the way the index is managed (passively).
However, if that is a concern, I would highly recommend QQQM for the investor over VGT. It’s also a great growth ETF and not as top heavy as VGT.
@@JeffTeeples Good insights. Thanks for the response
@@aparajith1159 Anytime! I appreciate the question.
Jeff - In one of your previous videos, you recommended a modern three fund portfolio of VOO/VGT/SCHD. Do you think the 50/50 allocation of VGT and SCHD is a better choice? And is XLK a good substitute for VGT?
Thanks for watching & for the feedback Bruce!
1) I do prefer about a third each of VOO, VGT, and SCHD. The 50/50 mix of SCHD and VGT somewhat creates a super version of a cornerstone holding because it ultimately makes a nice hybrid of dividend and growth stocks. It becomes a VOO, in a way, but of high quality companies in each category.
However, the S&P 500 has well over 100 years of data proving that it is an extremely difficult index to outperform. The best investors in the world simply suggest that common folks like me invest in something like VOO and stay the course. When they are being honest and not trying to take my money.
As much as I love THE mix of SCHD/VGT, I don't know how it will perform over many, many decades. I haven't seen it in the dot com crash, or the crazy 2008 situation. I want to stay open-minded and flexible as much as possible.
The mix has won every year I've invested, but I STILL consider VOO a nice stabilizer to have in my portfolio because past performance, especially the recent past, doesn't tell all of the story.
2) XLK is a great replacement for VGT. It's actually been quite a bit better recently because of the more concentrated methodology.
It has 67 holdings compared to VGTs 318.
They have an 82% weighted overlap, and are fully replaceable. Both are 100% tech. I prefer a few more small and mid sized tech companies in the basket, but you can't go wrong either way.
It's crazy when zooming out and looking at the total return since 2/1/2004 (when VGT became available):
VGT: 1,091.79%
XLK: 1,089.21%
The 'winner' changes constantly.
Im thinking qqq and vym 50/50 as cost averaging set it and forget it. Gives a lot more exposure and growth with the flattening of a dividend fund
I think that is a solid 1-2 punch! There are so many great combos.
I have schd, schg and swppx as a equal split every month. I was looking at vgt last year but never pulled the trigger.
Thanks for watching and for the comment. You have yourself an awesome mix there! Growth, dividend, and a cornerstone. Great mix!
@@JeffTeeples thanks. I always wonder if I should be doing anything different but I have a good amount in these taxable accounts. I also have a military pension at 80K a year currently and my 401k which I rolled over from my military tsp which should be worth 1.1 to 1.5 at 60 when I can draw. I really don't want to work after 60. I have another 15 years until then. We'll see what the market does.
Interesting. How far back do you have to go before the sp500 outperformed this mix?
Thanks for the question. SCHD was new in 2012, so I think VOO would outperform it that year, and it is basically tied in 2013 if I’m not mistaken.
I started with 2014 to grab the first full 10 years for my UA-cam videos, and reflect my portfolio.
I will not be cherry-picking start dates in the future updates, we will build from 2014 (I was 100% VOO before that, then started to dabble with the mix).
I have Schd and schg, interesting to see the performance differences between VGT and SCHG
Thanks for watching and for the comment. SCHG is solid, and is more balanced than VGT.
QQQM is my favorite pick for not 100% tech growth. It usually has a similar tech % on the allocation to SCHG, and I like the mix a little better.
But you are set up for great success with your mix as well! There are so many great ETFs.
@@JeffTeeples thanks for sharing your insights, I know it takes work to put these videos together. I appreciate all the people that take the time to provide a little education to help us novices.
@@RodGwinn absolutely. I don’t know it all, and look forward to learning and sharing more over the years.
"...or maybe it's both." slayed me, lol.🤣
Haha, I randomly remember that part. Seemed fitting right there (:
Thanks for the comment!
VOO/QQQM/SCHD adjust % for age. Feel like we're all on same page whether it's a new age 2 or 3 fund portfolio. Bonds and International stocks have been replaced by growth and strong dividend stocks/ETFs.
Thanks for watching & commenting Travis.
I agree with you, especially if the person has a long time period to continue investing. Bonds, to me, have never been worth it outside retirement (where I still think there are better setups, but they at least make sense).
But I have a very long mindset with investing. If bonds are flat and VGT is down 25%, people will be screaming 'I told you so', while I'm licking my chops and hitting the buy button on VGT and VOO (:
That is why time is absolutely required. My 'cash' stays in a money market, and I do think cash is important. About 10% of my portfolio.
The international exposure is a larger debate. I'm comfortable with the business conducted within the ETF holdings. However, I maaaaaay eventually own an ETF to get actual international holdings. Time will tell. People holding 30% or more have lost so much compound wealth it is unreal. I would rather be slightly late to any core changes.
Great info, question- i have fedility 401k, How can i get voo, vgt, schd, gling through fedilty could be higer fees, i can open a vanguard account best option
Thanks for watching & for the question.
Fidelity does not charge extra fees for ETFs. SCHD, VGT, and VOO are all ETFs, so you're good to go.
Fidelity specific would be FTEC for VGT & FXAIX for VOO (but it is an index fund instead of an ETF. ETFs are 'slightly' better IMO, but it doesn't 'really' matter).
@@JeffTeeples great I will look into this!
what asset analyser do you use to backcheck?
I use portfolio visualizer. Thanks for watching and for the question.
My current Roth IRA consists of
1.SCHD
2. QQQM (might switch to VGT)
3. SPLG
4. JEPQ
5. O
Thoughts? I’m 33. Also have a TSP ROTH IRA through DOD. Which is focused on growth, so this is why I’m more focused on dividends
Thanks for sharing. I think that portfolio is extremely well balanced. Very high probability of building serious wealth over the years.
Great video. Do you think SCHG could do as well as VGT In this test
Thanks for watching & commenting. SCHG is a solid growth ETF. It does fall quite a bit short of QQQ and VGT over the years.
I think I’ll make a video within a couple weeks about SCHG. Stay tuned!
What is a qualified dividend and are all div etf funds getting qualified dividendS? If not how can we know which funds are? TIA
Hey Steven! Thanks for the question. Qualified dividends are dividends paid by US companies that you have held for at least 60 days.
Most of the ETFs I discuss pay 100% qualified dividends. SCHD is in that club. They are taxed at a VERY favorable rate & the less known fact is that the taxes do not affect your marginal tax rate at all. It is all added up AFTER your ordinary income makes up your federal tax rate.
Most people are taxed either 0% or 15%, depending on your marginal tax rate (from your ordinary income). For very high earners the special rate is 20% (instead of their number 37%).
Long-term capital gains (stuff sold after owning for at least a year) and qualified dividends get the same special tax treatment of low tax rates and not being involved in your 'normal taxes' at all (tacked on after the fact).
@@JeffTeeples thank you for the explanation.
Would just VOO and VGT be ok. They have around 32% overlap.
VOO and VGT would be okay for a younger person with 15+ years left to invest. SCHD is what provides the floor to help VGT+SCHD beat VOO in the bad years. With VOO and VGT, the bad years will be REALLY bad. But, that's okay if you keep dollar cost averaging in during that time and you don't panic sell when everyone else is running.
@@JeffTeeples Im 21 so I appreciate the advice. I will keep that in mind going forward.
Should one still do that if they are investing today with where SCHD and VOO are currently?
There are different schools of thought. I believe in ZERO 'timing' the market. I'm 100% time in the market. It is proven to win over longer stretches of time. Plus, if you have 10% cash, like I keep, when the market goes way up, you naturally will put new money in cash to get it back to 10% (so you're not buying high without a decision). When the market crashes, you're naturally putting all new dollars into your portfolio (buying the dip) to get cash back to 10%.
I think that finding a system of qualify investment and staying the course is the best way to build wealth. Some will say 'but what if it's at an 'all-time high!'. To that I would say to research all of the new 'all-time highs' (:
Just to confirm they are the Fidelity equivalent for FDVV and FTEC ?
Hi Judy. Thank you for the question. Yes to FTEC, no to FDVV. However FDVV is a solid dividend ETF, but it is not equal to SCHD.
@@JeffTeeples THANK YOU SO MUCH for your reply!
Isn’t there something about high dividends that aren’t very tax efficient until you hit retirement?
Hey Kevin. There is. Dividends will create a taxable event (regardless if they are reinvested or not).
SCHD and DGRO are taxed as qualified dividends, so the special tax table is the same as long-term capital gains, but it is a ‘forced taxable event’.
Price appreciation will be taxed the exact same, assuming long-term capital gains. However, you don’t pay anything until you choose to sell.
I personally don’t mind the forced taxable event with qualified dividends. I think 15% is as favorable as it will get for me.
Great stuff Jeff..... I am a believer in the SCHG/VGT paired up with VOO.... It's all good. Thank you for your assessment...
Thanks for the comment Lance. Those are all three fantastic ETFs.