I buy 2 shares of jepi and jepq a month. I buy 8-12 shares of schd. The distributions from jepi/jepq at this point are buying almost 2 shares of schd per month. If for whatever reason I can't contribute to my portfolio, I'm still buying schd.
Great strategy to implement this information! I do something similar; I accumulate the dividends from my high-yielders and use that money to buy the long-term growers, like SCHD!
I am now a firm believer of long term dividend investing particularly a fan of SCHD. I have sold most of my individual stocks (some at a loss) and convert them to SCHD, so SCHD is now by far the biggest holding in my portfolio. I hope I am doing the right thing.
Hey Cindy. It is a great move to be sure. You may not 'get rich quickly' this way, but you will build stable & growing wealth over time. It is nearly impossible not to with something like SCHD. When the price goes down, the behind the scenes stats are only better as you continue to buy more. We don't like to admit it, but people are terrible stock pickers. It has been proven time and time again. If anyone implies you 'don't know what you're doing' by loading up on passively managed ETFs like SCHD, just smile and wish them luck (:
I have been doing the same for almost 2 years. I now hold mainly ETFs in my tax deferred accounts except for some individual REITs and BDCs. I still hold individual stocks in my taxable account as it would be a taxable event to convert those the ETFs.
Always an impartial, data-based explanation of various versions of dividend investing! I like the way you offer a strategy, explain who it would be best suited for and then show the data behind your suggestion! Very compelling and "easy-to-watch" video explanations! Keep up the great job!
Love it. Keep chipping away at it. Getting 3 shares for the price of 1 feels like a nice boost! Even though it's 'technically still the same value per share', I love the lower price and higher share count personally.
It's the best. I love the feeling of getting 'free shares' of SCHD because JEPQ paid so much cash. I know, I know, it's not free... But it feels like it! (:
I love that you breakdown how these various etfs do in relation to one another. I spent months playing with Portfolio Visualizer to determine which combination of growth(VGT/QQQM, dividend/value (SCHD)and foundation (VOO/VTI)etf would be best for me. Currently at 30% each now but within 5 years will alter percentages to be 25%/25%/50% SCHD.
Hey Roy. I love your current mix right now. It is what I'm rolling with as well. I've been considering ramping up SCHD as well as we get closer to retirement (still a lot of years left to be sure, and I'll still make these videos at that point, my wife has the 'normal job'). I've also considered ramping up the HODL Factory in retirement as well. I still want to see it perform well for a solid 3 to 5 years before going all in, but I'll be sprinkling more money in over the coming months to get ready. $1,000 extra coming Monday! (from money market).
Great question Roy. I think that is a solid move in or close to retirement when we don't want the extreme swings, but still want nice chunk of the tech growth. VIG is great for 'that' too (quite a bit more tech than DGRO). I could see something like 50/50 VIG/DGRO taking over there in retirement. I do think the rollercoaster of VGT/QQQM is better for 'long-term wealth building' in the working years. If it crashes, and it will, just keep on plowing in more money to get it back up to target within the portfolio. I think both work and it really depends on the investors situation and goal.
So well explained, as we are approx. 4 years from retirement and have good amount in our retirement accts(although much of it is in traditional IRA - RMD's will be quite hi), our plan is to generate passive income from investing in primarily in Dividend ETF's - and meet our expenses from these dividends and not touch the principal that much, Thanks for your great videos !
That is awesome Carl. I'm planning a similar path for my wife and I. This will be a good place for information about this style of investing. Thanks for watching!
When I see DGRO's total return I sometimes ask myself why I go only with SCHD and not split my allocation between them...but your video (as usual) helped me remember how good SCHD fits in a portfolio with VGT & QQQM and how little overlap it has compared with DGRO... I'm sure nobody will go wrong by going with both but for now I stay faithful to the ine and only King of dividend ETFs...thanks Jeff and let's grow!
Thanks for watching and commenting. You make multiple great points. I do think DGRO is great, and worth adding to a portfolio. However, SCHD plays very well with the popular growth ETFs. I don't think you can go wrong with either, but I'll take the low PE ratio and low overlap of SCHD to pair with VGT + QQQM. Thanks for your awesome support of the channel!
@@JeffTeeples The overlap with VGT and QQQM is 48%. Are you saying regardless of the overlap, you would still pair SCHD, VGT, and QQQM in a 3 eft portfolio?
I think VGT and QQQM are both great growth ETFs that pair well with SCHD. I love tech, but 100% is a bit much. QQQM is about 50% tech (hence the overlap). However, I would be sure to consider VGT and QQQM as the 'same category'. For example, if you wanted 50% value and 50% growth, you could go something like this: 50% VGT + 50% SCHD 50% QQQM + 50% SCHD 25% VGT + 25% QQQM + 50% SCHD I wouldn't go 33.3% of each, because growth would be overweight. I consider them the 'same category' and then the one you go with depends on how bullish you are on tech (both are tech heavy, but VGT is tech.... only, lol)
My favorite one-two punch in all of investing! Not only are they great investments for their category, but they also specifically complement one another in a variety of market conditions. Great choice!
Thanks for watching and for your extra level of support all along. I'm not going to lie, it feels good to drop them on Sunday. It just seems right at this point! I'll be making a few extra videos here and there moving forward, but I'll aim for a Sunday drop on most weeks if possible.
Hey Daman. I hadn’t seen that one yet, but man it looks pretty cool. I think that is basically JEPQ ran by Invesco. 29 basis points compared to 35 of JEPQ. I will definitely keep my eyes on this one. Will be interesting to see how it performs vs my favorite high yield ETF on the market (JEPQ).
That seems about right for price return. I have the total return (dividends reinvested) showing as follows for YTD on seeking alpha as of 10/20/2024: DGRO: 20.51% SCHD: 16.32%
Thank you Jeff for the reminder to stay on track every week. I get distracted by other youtube videos with other div ETFs like CGDV, FDVV, IWY etc..but i think OVERLAP is the key here.
Thanks for watching and for the kind words. It is easy to get lost in the news and other videos (I do down rabbit holes all the time myself). And of course I'm not saying my way is objectively right or anything, but I like to provide 'the other side' from the hot news to try to help people (and myself) stay the course. For example, everyone is saying buy growth right now! If you buy SCHD you are wasting money. VGT, QQQM, SCHG is where it is at. I make videos about buying SCHD, lol. Because it is being greedy when others are fearful. When growth crashes eventually, I'll be the guy making videos about low-key picking up some VGT and SCHG, as everyone else is saying 'I told you SCHD is king!!!!'. I think the high yielding investments that don't perform on total returns for long-term investors are a great example of this. They have a use, for cash-flow *need* now, but are otherwise a long-term waste. Like bonds (:
What is remarkable is that the relatively high yield SCHD also has a very good total return. I think this is driven by the reconstitution and rebalancing algorithm because the individual holdings of VIG tend to have higher dividend growth rates. Over the last decade, VIG and SCHD had a very similar total return, despite relatively little portfolio overlap. One thing lacking is the impact of something like the "lost decade" bear markets which we haven't experienced since the 1999-2009 time period. I wonder which strategy would have worked better during the lost decade.
These are excellent points. I think the reconstitution is vital each year as well. A lot of people don't like when companies like AVGO are dropped in general. But SCHD assures a nice combo of high yield, high dividend growth, return on equity, cash-flow, and low debt. It makes for a better balance instead of grabbing 'all companies that grow dividends' like VIG and DGRO. I think SCHD will do better in most down markets. This bull run has been hard to test, but we will eventually see a drop play out. They are all different, but I think SCHD is well equipped for many market conditions.
I found a paper written by Izzy Wang called “Dividend Strategy with Quality Yields - The Dow Jones Dividend 100 Indices” which the SCHD I believe is indexed on Although SCHD was launched in 2011, but the index has value since 1999, the paper gives 15 year and 20 year performance of the index with total return close to 12%, this convinces me that I will be ok to put a portion of my portfolio in SCHD.
I think it's a great call, Cindy. And even when there are bumps, we're buying *more* shares that consistently grow the dividends per share. I see it as a win/win. SCHD will be the largest holding in my retirement portfolio someday.
Hi Jeff. I have been thinking about how to simplify my portfolio. I have a mid 7 figure account, with lots of VOO and VTI. These two holdings have lots of gains in my taxable accounts. I am trying to move my portfolio to 75% VOO and VTI and 25% SCHD, VYM, and DGRO. How do you feel about this mix?
Hey Richard. I love that mix. Can never go wrong with VOO and/or VTI. They are great mixes of value and growth. Adding in the dividend ETFs gives a nice boost in passive income. I think 75% cornerstone / 25% dividend is a nice mix. Especially when you have a high balance like in your case.
Great Post as always!!! Are there any mathematical investment advantages to holding larger positions in ETF such as JEPQ or JEPI and then use the dividends to buy SCHD or SCHG? I keep seeing this idea pop up in several investment videos, but not sure if this is an overall good strategy. Would love to hear your ideas on this.
Thanks for watching and dropping a comment. Great question. 'Technically' it is better to buy and hold long-term investments like QQQM over JEPQ, or VOO over JEPI, etc. If it is a same underlying index, it is nearly impossible for the high yield + high expense ratio + call option version to outperform the base index. You can chart all of these to see what I mean over time. However, I do like the logic and feeling of progression in using my JEPQ dividends to purchase my buy & hold investments. It's not a 'bad move' at all, but if you don't *need* cash then it is a better investment to buy and hold the underlying index in a low cost form such as QQQM and VOO. Once we don't need the cash from JEPQ, I'll likely rotate out a bit in favor of the QQQM, VGT, VOO, and SCHDs of the world. But it is a lot of fun to have the cash flowing! Not going to lie (:
I'm with you. And it's crazy that SCHD is the one with the higher yield as well, to pair with the growth. Zooming out on the total return, it's right there as well. I love the methodology of SCHD. I think DGRO and VIG will be competitive on dividend growth and total returns, long-term, but SCHD will always have the yield and still be great at the other two key metrics.
DGRO has beaten SCHD in Total Return two years in a row and leading by over 3% this year. Certainly no surging going on. SCHD is a fine investment, just not as good as DGRO lately. It can flip flop anytime which is why I buy equal shares of both.
Hey Tom. For sure, and I love DGRO (my second favorite dividend ETF). On this channel I take a long-term view of everything. The 'surge' reference was for the key dividend metrics (which were not quite as good last year for SCHD). It had a 'surge' on the dividend CAGRs and total returns from the 5 and 10 year view. I think all 4 of these are solid choices, but I never care too much about the last year or two on returns. It will be the same vibes if DGRO falters over a year. That doesn't move the needle for me, personally. Well, it does, I think it screams buy (:
I've been implementing FDVV into more of my dividend videos lately. I had it in the recent update (that I will be doing twice per year). The most recent is right there: ua-cam.com/video/zvsiEqyv75Q/v-deo.htmlsi=YehJEPEP3MFfqBYw Thanks!
Good morning Jeff, love these kind of videos. With Schd basically on sale now would you focus on accumulating more Schd or just continue buying VOO also?
Hey Kevin. Thanks for the positive feedback. I would still buy them both, and focus on the one that my portfolio was light on at the time. I love SCHD & VOO. They are both best in class for 'what they do'.
ThanX Jeff. Great information on four amazing dividend producing ETF’s. Hold SCHD & DGRO but not VYM or VIG. On another note - my first grandchild was born a couple of weeks ago and was looking at 529 plans. Was wondering about something like SCHG or ??? To get him going for school later in life. Thoughts ??? Please take care and enjoy the family and weekend. Be well.
Hey Lance. Huge congratulations on the grandchild! That is so exciting and so much more important than all of this stuff (: You have my favorite 2 dividend ETFs, and I don't think we need to buy the other ones. VIG is a nice benchmark to have because it is about a quarter tech, but we have growth sections of the portfolio for that. SCHD + DGRO will do very well for building your stable wealth and growing cash-flow. I think SCHG is an amazing holding for a 529. You have a lot of years to get it building. Then much like retirement, the closer the time comes the more you can move some into holdings with more stable floors. In the building years, dollar cost average into SCHG and win the next couple decades.
@@JeffTeeplesThanX Jeff. Yes, he’s almost one month old. I’m very happy for my daughter. Yes, I will open a 529 and contribute monthly plus add BDay and holiday $$ in there too. Thanks again. Stay safe. Go TrailBlazers..!!
Another great discussion Jeff! I wonder whether you can assume a longterm 11% Divd CAGR - eventually you get diminishing returns or ridiculous yields which are not sustainable... can you show the net yield by year to see how much it's grown by year 15? I doubt it's attainable... Not disagreein with your analysis other than it might be a little optimistic on the SCHD side...
Hey John. I definitely agree with that. When I do my personal forecasts to estimate my future, I use conservative figures. I wouldn't bank on 11% either. 10 years is a long run, but it has also been a steady bull market in general. I usually take the lowest of the 3, 5, or 10 year CAGRs on my personal models. Even that is high for SCHD right now, but it at least helps tame it down a little.
Jeff - could you please look at this review of the individual holdings in SCHD and give us your thoughts? I have come to the same conclusion that Joe Hogue has - about half the companies in SCHD are overvalued and will see minimal price growth. ua-cam.com/video/lLEqCACo0h4/v-deo.html
I think Joe makes some great points. I do disagree that it is worth holding the individual companies from SCHD to avoid a 6 basis points expense ratio. ER are very important, but .06% is nothing and well worth the balancing and reconstitution process. As far as the value, SCHD is a solid value compared to all of the ETFs I track except for maybe COWZ. If it is considered overpriced, then VOO, VGT, VIG, DGRO, QQQM, VTI, and many others are *way* overpriced. I think the methodology of SCHD does a great job of finding value within the dividend growth world. It isn't perfect, as nothing is, but I think it is sound from a value perspective in general.
Loved the illustration! If I was young and was gifted $1 million, schd for sure. If I was older and had less years till my last days on earth and needed the extra income, maybe jepq for the higher cash flow now would be helpful! A combo of the two is always great so we can balance yield now to pay the bills, and growth rate of schd to keep up with inflation! Great video and scenario as always Professor Teeples 🤠
This comment summarized it perfectly. This is why there is no 'one size fits all' for these things. Thanks for watching and commenting. I will say, before learning the depth of this stuff, I do think people overvalue high yield in general. It's why I try to balance the scales with videos like this. It is helpful to understand for long-term success.
I love how in depth you explain dividends. You’ve earned a new subscriber sir.
Hey Chris. I appreciate the kind words, you taking the time to watch the video, and the subscription. Welcome to the community!
I buy 2 shares of jepi and jepq a month. I buy 8-12 shares of schd. The distributions from jepi/jepq at this point are buying almost 2 shares of schd per month. If for whatever reason I can't contribute to my portfolio, I'm still buying schd.
I love that strategy in general. Take the high yielding cash-flow and dump it into growers. Feels like a win-win to me!
Great strategy to implement this information! I do something similar; I accumulate the dividends from my high-yielders and use that money to buy the long-term growers, like SCHD!
@@JeffTeeplesI do the same thing with svol dividends go into schd
I am now a firm believer of long term dividend investing particularly a fan of SCHD. I have sold most of my individual stocks (some at a loss) and convert them to SCHD, so SCHD is now by far the biggest holding in my portfolio. I hope I am doing the right thing.
Hey Cindy. It is a great move to be sure. You may not 'get rich quickly' this way, but you will build stable & growing wealth over time. It is nearly impossible not to with something like SCHD. When the price goes down, the behind the scenes stats are only better as you continue to buy more.
We don't like to admit it, but people are terrible stock pickers. It has been proven time and time again. If anyone implies you 'don't know what you're doing' by loading up on passively managed ETFs like SCHD, just smile and wish them luck (:
I have been doing the same for almost 2 years. I now hold mainly ETFs in my tax deferred accounts except for some individual REITs and BDCs.
I still hold individual stocks in my taxable account as it would be a taxable event to convert those the ETFs.
Always an impartial, data-based explanation of various versions of dividend investing! I like the way you offer a strategy, explain who it would be best suited for and then show the data behind your suggestion! Very compelling and "easy-to-watch" video explanations! Keep up the great job!
Thank you Mike! That is awesome feedback, and I appreciate you taking the time to watch the videos. Great to have you in this community.
Awesome video Jeff...I have 760 shares of schd, now that the 3 to 1 split has taken place it will be easier to get to my goal of 5,000 shares 😊
Love it. Keep chipping away at it. Getting 3 shares for the price of 1 feels like a nice boost! Even though it's 'technically still the same value per share', I love the lower price and higher share count personally.
I do the same i get 125 a month per month with high yield and put into schd monthly
It's the best. I love the feeling of getting 'free shares' of SCHD because JEPQ paid so much cash. I know, I know, it's not free... But it feels like it! (:
I love that you breakdown how these various etfs do in relation to one another. I spent months playing with Portfolio Visualizer to determine which combination of growth(VGT/QQQM, dividend/value (SCHD)and foundation (VOO/VTI)etf would be best for me. Currently at 30% each now but within 5 years will alter percentages to be 25%/25%/50% SCHD.
Jeff, what would your thoughts be on adding Dgro in place of VGT/QQQM as I slowly reallocated new percentages over the next few years?
Hey Roy. I love your current mix right now. It is what I'm rolling with as well. I've been considering ramping up SCHD as well as we get closer to retirement (still a lot of years left to be sure, and I'll still make these videos at that point, my wife has the 'normal job').
I've also considered ramping up the HODL Factory in retirement as well. I still want to see it perform well for a solid 3 to 5 years before going all in, but I'll be sprinkling more money in over the coming months to get ready. $1,000 extra coming Monday! (from money market).
Great question Roy. I think that is a solid move in or close to retirement when we don't want the extreme swings, but still want nice chunk of the tech growth. VIG is great for 'that' too (quite a bit more tech than DGRO). I could see something like 50/50 VIG/DGRO taking over there in retirement.
I do think the rollercoaster of VGT/QQQM is better for 'long-term wealth building' in the working years. If it crashes, and it will, just keep on plowing in more money to get it back up to target within the portfolio.
I think both work and it really depends on the investors situation and goal.
So well explained, as we are approx. 4 years from retirement and have good amount in our retirement accts(although much of it is in traditional IRA - RMD's will be quite hi), our plan is to generate passive income from investing in primarily in Dividend ETF's - and meet our expenses from these dividends and not touch the principal that much, Thanks for your great videos !
That is awesome Carl. I'm planning a similar path for my wife and I. This will be a good place for information about this style of investing. Thanks for watching!
Thanks Jeff! You and your family have a wonderful Sunday.
Hey Chris. Thanks for the Sunday wishes. Right back at you! I appreciate your consistent support of the channel.
My #1 holding by far SCHD #2 VYM
Both great dividend ETFs! Thanks for watching and commenting.
keep pumping out those financial informational videos Jeff!!!1
Will do Kevin. Thanks for watching and for the consistent support of the channel.
When I see DGRO's total return I sometimes ask myself why I go only with SCHD and not split my allocation between them...but your video (as usual) helped me remember how good SCHD fits in a portfolio with VGT & QQQM and how little overlap it has compared with DGRO... I'm sure nobody will go wrong by going with both but for now I stay faithful to the ine and only King of dividend ETFs...thanks Jeff and let's grow!
Thanks for watching and commenting. You make multiple great points. I do think DGRO is great, and worth adding to a portfolio. However, SCHD plays very well with the popular growth ETFs. I don't think you can go wrong with either, but I'll take the low PE ratio and low overlap of SCHD to pair with VGT + QQQM. Thanks for your awesome support of the channel!
@@JeffTeeples The overlap with VGT and QQQM is 48%. Are you saying regardless of the overlap, you would still pair SCHD, VGT, and QQQM in a 3 eft portfolio?
I think VGT and QQQM are both great growth ETFs that pair well with SCHD. I love tech, but 100% is a bit much. QQQM is about 50% tech (hence the overlap).
However, I would be sure to consider VGT and QQQM as the 'same category'. For example, if you wanted 50% value and 50% growth, you could go something like this:
50% VGT + 50% SCHD
50% QQQM + 50% SCHD
25% VGT + 25% QQQM + 50% SCHD
I wouldn't go 33.3% of each, because growth would be overweight. I consider them the 'same category' and then the one you go with depends on how bullish you are on tech (both are tech heavy, but VGT is tech.... only, lol)
@@JeffTeeples Okay. That makes more sense. The previously assumption didn't make more sense to me because of the huge overlap.
Thank you for the impressive analysis!
Of course. Thank you for taking the time to watch the video and for leaving a comment. I appreciate the support you have provided the channel!
@@JeffTeeples 👏
Thanks for the video Jeff! It is another interesting and informative video. It is much appreciated.
Hey Alex. Thanks for taking the time to watch it. I love making these ones as a math nerd (:
I hold VGT and SCHD for a nice one-two punch.
My favorite one-two punch in all of investing! Not only are they great investments for their category, but they also specifically complement one another in a variety of market conditions. Great choice!
Enjoying my Sunday morning lesson. Let's Grow! 🌲
Thanks for watching and for your extra level of support all along. I'm not going to lie, it feels good to drop them on Sunday. It just seems right at this point! I'll be making a few extra videos here and there moving forward, but I'll aim for a Sunday drop on most weeks if possible.
Have you looked at QQA yet? I keep getting ads for it. Looks brand new.
Hey Daman. I hadn’t seen that one yet, but man it looks pretty cool. I think that is basically JEPQ ran by Invesco. 29 basis points compared to 35 of JEPQ. I will definitely keep my eyes on this one. Will be interesting to see how it performs vs my favorite high yield ETF on the market (JEPQ).
Yahoo finance has SCHD 13.5% and DGRO 18.7% ytd..?
That seems about right for price return. I have the total return (dividends reinvested) showing as follows for YTD on seeking alpha as of 10/20/2024:
DGRO: 20.51%
SCHD: 16.32%
Thank you Jeff for the reminder to stay on track every week. I get distracted by other youtube videos with other div ETFs like CGDV, FDVV, IWY etc..but i think OVERLAP is the key here.
Thanks for watching and for the kind words. It is easy to get lost in the news and other videos (I do down rabbit holes all the time myself). And of course I'm not saying my way is objectively right or anything, but I like to provide 'the other side' from the hot news to try to help people (and myself) stay the course.
For example, everyone is saying buy growth right now! If you buy SCHD you are wasting money. VGT, QQQM, SCHG is where it is at. I make videos about buying SCHD, lol. Because it is being greedy when others are fearful.
When growth crashes eventually, I'll be the guy making videos about low-key picking up some VGT and SCHG, as everyone else is saying 'I told you SCHD is king!!!!'.
I think the high yielding investments that don't perform on total returns for long-term investors are a great example of this. They have a use, for cash-flow *need* now, but are otherwise a long-term waste. Like bonds (:
What is remarkable is that the relatively high yield SCHD also has a very good total return. I think this is driven by the reconstitution and rebalancing algorithm because the individual holdings of VIG tend to have higher dividend growth rates. Over the last decade, VIG and SCHD had a very similar total return, despite relatively little portfolio overlap. One thing lacking is the impact of something like the "lost decade" bear markets which we haven't experienced since the 1999-2009 time period. I wonder which strategy would have worked better during the lost decade.
These are excellent points. I think the reconstitution is vital each year as well. A lot of people don't like when companies like AVGO are dropped in general. But SCHD assures a nice combo of high yield, high dividend growth, return on equity, cash-flow, and low debt. It makes for a better balance instead of grabbing 'all companies that grow dividends' like VIG and DGRO.
I think SCHD will do better in most down markets. This bull run has been hard to test, but we will eventually see a drop play out. They are all different, but I think SCHD is well equipped for many market conditions.
I found a paper written by Izzy Wang called “Dividend Strategy with Quality Yields -
The Dow Jones Dividend 100 Indices” which the SCHD I believe is indexed on Although SCHD was launched in 2011, but the index has value since 1999, the paper gives 15 year and 20 year performance of the index with total return close to 12%, this convinces me that I will be ok to put a portion of my portfolio in SCHD.
I think it's a great call, Cindy. And even when there are bumps, we're buying *more* shares that consistently grow the dividends per share. I see it as a win/win. SCHD will be the largest holding in my retirement portfolio someday.
Hi Jeff. I have been thinking about how to simplify my portfolio. I have a mid 7 figure account, with lots of VOO and VTI. These two holdings have lots of gains in my taxable accounts. I am trying to move my portfolio to 75% VOO and VTI and 25% SCHD, VYM, and DGRO. How do you feel about this mix?
Hey Richard. I love that mix. Can never go wrong with VOO and/or VTI. They are great mixes of value and growth.
Adding in the dividend ETFs gives a nice boost in passive income. I think 75% cornerstone / 25% dividend is a nice mix. Especially when you have a high balance like in your case.
Great Post as always!!! Are there any mathematical investment advantages to holding larger positions in ETF such as JEPQ or JEPI and then use the dividends to buy SCHD or SCHG? I keep seeing this idea pop up in several investment videos, but not sure if this is an overall good strategy. Would love to hear your ideas on this.
Thanks for watching and dropping a comment. Great question. 'Technically' it is better to buy and hold long-term investments like QQQM over JEPQ, or VOO over JEPI, etc. If it is a same underlying index, it is nearly impossible for the high yield + high expense ratio + call option version to outperform the base index. You can chart all of these to see what I mean over time.
However, I do like the logic and feeling of progression in using my JEPQ dividends to purchase my buy & hold investments. It's not a 'bad move' at all, but if you don't *need* cash then it is a better investment to buy and hold the underlying index in a low cost form such as QQQM and VOO.
Once we don't need the cash from JEPQ, I'll likely rotate out a bit in favor of the QQQM, VGT, VOO, and SCHDs of the world. But it is a lot of fun to have the cash flowing! Not going to lie (:
I’ve been looking for reasons to buy etfs like vym dgro and vig but I can’t give up the massive div growth of schd
I'm with you. And it's crazy that SCHD is the one with the higher yield as well, to pair with the growth. Zooming out on the total return, it's right there as well. I love the methodology of SCHD. I think DGRO and VIG will be competitive on dividend growth and total returns, long-term, but SCHD will always have the yield and still be great at the other two key metrics.
DGRO has beaten SCHD in Total Return two years in a row and leading by over 3% this year. Certainly no surging going on. SCHD is a fine investment, just not as good as DGRO lately. It can flip flop anytime which is why I buy equal shares of both.
Hey Tom. For sure, and I love DGRO (my second favorite dividend ETF). On this channel I take a long-term view of everything. The 'surge' reference was for the key dividend metrics (which were not quite as good last year for SCHD). It had a 'surge' on the dividend CAGRs and total returns from the 5 and 10 year view.
I think all 4 of these are solid choices, but I never care too much about the last year or two on returns. It will be the same vibes if DGRO falters over a year. That doesn't move the needle for me, personally. Well, it does, I think it screams buy (:
Can you compare SCHD to FDVV?
I've been implementing FDVV into more of my dividend videos lately. I had it in the recent update (that I will be doing twice per year). The most recent is right there:
ua-cam.com/video/zvsiEqyv75Q/v-deo.htmlsi=YehJEPEP3MFfqBYw
Thanks!
Good morning Jeff, love these kind of videos. With Schd basically on sale now would you focus on accumulating more Schd or just continue buying VOO also?
Hey Kevin. Thanks for the positive feedback. I would still buy them both, and focus on the one that my portfolio was light on at the time. I love SCHD & VOO. They are both best in class for 'what they do'.
It’s Teeples Time!
I have to admit, it just feels right on a Sunday! Thanks for watching.
ThanX Jeff. Great information on four amazing dividend producing ETF’s. Hold SCHD & DGRO but not VYM or VIG. On another note - my first grandchild was born a couple of weeks ago and was looking at 529 plans. Was wondering about something like SCHG or ??? To get him going for school later in life. Thoughts ??? Please take care and enjoy the family and weekend. Be well.
Hey Lance. Huge congratulations on the grandchild! That is so exciting and so much more important than all of this stuff (:
You have my favorite 2 dividend ETFs, and I don't think we need to buy the other ones. VIG is a nice benchmark to have because it is about a quarter tech, but we have growth sections of the portfolio for that. SCHD + DGRO will do very well for building your stable wealth and growing cash-flow.
I think SCHG is an amazing holding for a 529. You have a lot of years to get it building. Then much like retirement, the closer the time comes the more you can move some into holdings with more stable floors. In the building years, dollar cost average into SCHG and win the next couple decades.
@@JeffTeeplesThanX Jeff. Yes, he’s almost one month old. I’m very happy for my daughter. Yes, I will open a 529 and contribute monthly plus add BDay and holiday $$ in there too. Thanks again. Stay safe. Go TrailBlazers..!!
Another great discussion Jeff! I wonder whether you can assume a longterm 11% Divd CAGR - eventually you get diminishing returns or ridiculous yields which are not sustainable... can you show the net yield by year to see how much it's grown by year 15? I doubt it's attainable... Not disagreein with your analysis other than it might be a little optimistic on the SCHD side...
Hey John. I definitely agree with that. When I do my personal forecasts to estimate my future, I use conservative figures. I wouldn't bank on 11% either. 10 years is a long run, but it has also been a steady bull market in general.
I usually take the lowest of the 3, 5, or 10 year CAGRs on my personal models. Even that is high for SCHD right now, but it at least helps tame it down a little.
Jeff - could you please look at this review of the individual holdings in SCHD and give us your thoughts? I have come to the same conclusion that Joe Hogue has - about half the companies in SCHD are overvalued and will see minimal price growth. ua-cam.com/video/lLEqCACo0h4/v-deo.html
I think Joe makes some great points. I do disagree that it is worth holding the individual companies from SCHD to avoid a 6 basis points expense ratio. ER are very important, but .06% is nothing and well worth the balancing and reconstitution process.
As far as the value, SCHD is a solid value compared to all of the ETFs I track except for maybe COWZ. If it is considered overpriced, then VOO, VGT, VIG, DGRO, QQQM, VTI, and many others are *way* overpriced. I think the methodology of SCHD does a great job of finding value within the dividend growth world.
It isn't perfect, as nothing is, but I think it is sound from a value perspective in general.
Loved the illustration! If I was young and was gifted $1 million, schd for sure. If I was older and had less years till my last days on earth and needed the extra income, maybe jepq for the higher cash flow now would be helpful! A combo of the two is always great so we can balance yield now to pay the bills, and growth rate of schd to keep up with inflation! Great video and scenario as always Professor Teeples 🤠
This comment summarized it perfectly. This is why there is no 'one size fits all' for these things. Thanks for watching and commenting.
I will say, before learning the depth of this stuff, I do think people overvalue high yield in general. It's why I try to balance the scales with videos like this. It is helpful to understand for long-term success.