initially did the big ticket buy, 125k into SCHD, 75k TSLA, 25k VYM, 25K VUG. Now I'm dca buying roughly 2k every week of whatever is on sale, and looking to add more tech positions to my portfolio. I'm looking to hold long term 15 - 20 years, so hopefully my lump sum buy in doesn't bite me in the ass long term.
I love SCHD and currently own 2604 shares. I regularly buy more shares, but I also invest in growth stocks/ETFs. Right now, I focus on growth, but I plan to switch to dividend-paying value stocks/ETFs eventually. It’s advisable to engage guidance for a well-diversified portfolio instead of relying solely on speculations. That’s what works for my spouse and I. We've made over 80% capital growth minus dividends.
Hey, I'm trying to find a certified one to boost my investments/portfolio, but it's tough online. Can I get a rec from you, since you know about this stuff?
Jennifer Leigh Hickman is the advisor I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
It's one of the best dividend ETFs for that! In case you're curious, last year I reviewed 10 of my favorite dividend ETFs and tried rating each one for dividend safety. Here are my writeups: www.simplysafedividends.com/world-of-dividends/posts/14-2023-best-dividend-etfs-top-10-income-funds-ranked Thanks for watching! - Brian
I own SCHD. It is a good fit in my portfolio. Also, if people complain about it then they don’t know what it buys and how. That’s the problem…people won’t read and do their homework. I like how they select the stocks, quantity, and low expense costs.
Thanks for watching and commenting! I'm with you - a lot of fund "investors" seem to just look at a fund's recent performance and make a blanket judgement. There's a lot to like with SCHD if you take a few minutes to understand how the fund works. Best regards, Brian
Really good video, Brian. As a holder of SCHD, Im more interested in safety and stability rather than high growth. Appreciate you taking the time to do this.
Thanks for your kind words, Katie! Your goals sound like a great fit for SCHD. That makes it a lot easier to stay the course, even with "safety" and "stability" factors are not in favor by the market - the best time to buy insurance is when others aren't worried about risk. - Brian
Thanks for watching and commenting! I like DGRO a lot, too. It's a little dated, but last year I reviewed 10 of my favorite dividend ETFs (including SCHD and DGRO) in case you're interested. You can find them here: www.simplysafedividends.com/world-of-dividends/posts/14-2023-best-dividend-etfs-top-10-income-funds-ranked - Brian
SCHD's synthetic dividend growth is based mainly on a buy low sell high concept. But this not only happens during the yearly reconstitution but also the quarterly rebalancing. So for example, LMT and ABBV might be pared back in Sept to 4% and that profit would be allocated to stocks that have gone down like CVX or VZ which have a higher yield than LMT and ABBV.
This. I came here specifically for this comment. The holdings *do* change annually and rebalance quarterly. They regularly trim and even cut their winners, who would no longer have high yields while rolling that money into the higher yielders, which is why it seems odd to call this out as something new to be concerned with. Look at their holdings. When looked at as a portfolio rather than the fund, they've probably never had an average dividend cagr in the 11-14% SCHD investors have grown accustomed to, but that's how the strategy works. If the goal was *just* stable dividend growth, VYM or VIG are probably better suited, or maybe even SPHD(I can't believe I just suggested SPHD)
Follow-up comment, it's no coincidence June is always a higher dividend than March. March includes the old winners, while June is the first to include the new "value" buys.
Great comment, thanks for sharing with the group! You're absolutely right that the monthly dividend reviews and especially the quarterly rebalancing further tops off SCHD's annual dividend growth rate. I'm curious to explore just how much of a boost that provides. It seems difficult to answer without having a record of quarterly holdings going back more than a couple of years. I know SCHD's turnover rate can fluctuate a good amount one year to the next - some below 10%, some closer to 50%. So the boost from quarterly rebalances might depend on the year with how individual holdings are performing, or perhaps the higher turnover years were driven mostly by the annual rebalance. I think the rebalance in March was on the higher side, and I'd be surprised if the quarterly rebalances were enough to boost the ~4% organic growth achieved by the holdings this year to something closer to the 10% averaged by SCHD over the long run. Either way, SCHD's payouts seem likely to keep moving up and to the right, with future rebalancing activity being a big driver of how fast we go. Thanks again for watching and sharing your insightful comment! - Brian
Good points! It does make sense that June would usually be higher than March given the rebalancing. (Just to clarify, the 20%+ growth I referenced compared Q224 to Q223). This year's boost was a relatively big one even from that perspective, though. 2024's Q2 dividend grew 35% from Q1. Here's the sequential growth SCHD saw in past years: 2023: +11% 2022: +36% 2021: +7% 2020: +0% (Covid noise?) 2019: +20% (the year-over-year change was surprisingly low at just 4%) Probably splitting hairs to some extent. In the future, I'd like to go back to see what the organic growth rate of SCHD's underlying holdings was after those rebalances to compare to the ~4% rate achieved by its current holdings this year. Thanks again for watching and commenting! - Brian
When I first subscribed to SSD a few years ago, you were kind enough to give me a call and asked about my reasons for subscribing. I honestly gave a reply that I’m embarrassed about today but my answer was to follow my dividend stocks through your system for a year and verify things in my portfolio to give me confidence in my approach. I did not intend to renew and thought once I thought my portfolio was on point I could put myself in a set it and forget it mode. Needless to say, I am still a subscriber and indeed my holdings are no longer set it and forget it even though I work to keep a low turnover rate and have that as my goal. SSD goes a long way to giving me confidence as an amateur retired investor that gives me much more back in value than what I pay in subscription.
I love SCHD and currently own 604 shares. I do buy shares regularly but I also love growth stocks/ETFs and buy those also. I’m a bit more focused on growth right now but plan to eventually sell those off and replace them with dividend paying value stocks/ETFs.
Thanks for watching and sharing your insight on SCHG. I wasn't familiar with that ETF, but I wasn't surprised to see it's a large-cap growth fund. Those have done quite well the last few years and provide a nice complement to SCHD's value tilt (mostly from its prioritization of higher yields). Maintaining a balanced approach is always better than trying to chase what's been hot. - Brian
Hey Brian, I've been following information on your website for years now. It's nice to see you starting a UA-cam channel. Thanks for sharing your thoughts on SCHD.
ThanX Brian... Great video.. Long SCHD.... pair it w/ DGRO and JEPI for some cash - Retiree here.... Thanks for your informative & quality videos along with SSD which is excellent for any dividend investor or watcher.... Please be well....
Thanks for watching! A couple other commenters have mentioned they pair SCHD with a growth-focused ETF like DGRO and SCHG. Your addition of JEPI to the mix is interesting, too. I'd like to do a video on covered call funds sometime. Really glad to hear you are continuing to enjoy SSD! Thank you very much for your support - it means a lot to me and the team. We will always be here if you ever need anything. Best regards, Brian
Thanks, David! I'm glad SCHD was able to get so much upside from AVGO. While I'm usually not a fan of selling winners, I can't be too upset with SCHD exiting AVGO given its historically high valuation multiple and all the enthusiasm behind AI that may not line up as well with the revenue opportunity that emerges the next few years. We will see. Fortunately, SCHD has plenty of other consistent growers in its portfolio. Thanks again for watching and for your support! - Brian
Its good that they sold AVGO. I cannot hold any ETF which owns anti value, herd stocks which go up on hype and not fundamentals. I dont like very long periods of going nowhere once music stops and people run for exits. Look at Nike how these stories end.
Thanks, Thorsten! I think some stock pickers like the "extra" diversification they achieve with a couple of ETFs in their portfolios as well. In my experience (and according to many studies out there), a stock portfolio can be reasonably diversified with as few as 20 to 40 stocks. But managing the behavioral side of investing and finding an approach you can stick with in good times and bad is just as important! Thanks for watching! - Brian
We started growing a position in $SCHD in our bridge account. We plan on building it up along with $FDVV ETF to as a counterbalance on the markets ups and downs. The plan is to use those 2 dividends generating ETFs for our Bucket 2 in retirement (3 years' worth of expenses) instead of bonds.
Thanks for sharing how you are using SCHD! I've heard a little about FDVV but haven't looked at it closely. I'll check it out. Good luck on your retirement journey! Thanks for watching, Brian
@@simplysafedividends It’s a Fidelity passively run low cost ETF that is based on Dividends but doesn’t have the SCHD value stocks aim. The holdings crossover is on 15%. If you compare historical returns, it’s interesting to see the difference when years are up in the S&P 500 with them. Having the combo diversifies even further with the upside of strategic growth.
Paid Subscriber Question: I see that you pulled SCHD up in Your - “Play Portfolio”, and that there are both an ‘Import’ and an ‘Add’ to build that (Play Portfolio); - Did you Manually Build that SCHD Portfolio ( by Add) - Or is there a way to ‘Import’ the Holdings of Core ETFs like SCHD, DGRW, MOAT, etc? ( So that we SUBSCRIBERS can Monitor and Evaluate the Holdings in our Core Holdings in addition to the Evaluations that we make on our Satellite or Explore Individual Holdings (stocks) Thank you for your time and kind consideration in responding . . . * BTW: Isn’t it tiring and impractical for people to compare SCHD to ‘the Market’ (S&P) when that is not really SCHD’s Benchmark or, more importantly - not the reason that people diversify and/or hold SCHD. Frankly it is to build a more conservative and INCOME producing Portfolio like alternate 80/20, or 70/30 portfolios or ETFs - like FBALX. * Someone with substantial holdings could - live off of the Income produced by Dividend Growth Portfolios and watch their capital increase for a legacy/family portfolio that weathers the market better and, in addition to funding retirement - is able to fund vacations with grandchildren, their college, weddings, and first home down payments. Aren’t those the goals and objectives of Dividend Growth Portfolios?
1. That's a *lot* for a YT comment. 2. I 100% agree with the "market comparison" point. If you want market returns, buy the market. If you want something else, buy something else.
Hi Tom! Thanks for watching and commenting. Those are great questions. I downloaded SCHD's holdings using the "Export All Holdings" link found under the Portfolio section on its website here: www.schwabassetmanagement.com/products/schd#portfolio After opening that spreadsheet, I removed everything but the ticker symbols (kept in column A) and share quantities (kept in column B). Note that you need to check if the downloaded symbols are all relevant - for example, SCHD has a "USD" field that represents cash rather than the tradable security with that ticker symbol. I then saved that spreadsheet, created a new play portfolio on SSD, and uploaded my SCHD spreadsheet. I can see how it would be nice to have popular dividend ETFs available as portfolios on the site. We'll keep that in mind and would be happy to help you if you ever would like to see them - just shoot us an email. I'll also mention that any ETFs you own will be broken out in your portfolio's sector diversification report based on their underlying allocations. That let's you see your overall exposure to tech and other areas including everything you own, not just your individual stocks. Regarding your final point about comparisons between SCHD and the market - I think your reasoning is spot on, but there is always a big crowd that focuses solely on benchmarking everything against the broader market rather than understanding an individual investor's unique goals. I don't think that will ever change :) Thank you for your support, and feel free to email us if we can help you get any ETFs loaded as play portfolios in your account. Best regards, Brian
@@simplysafedividends Brian: Thank you - for helping me and other Subscribers learn how to use this method to evaluate Core ETF Holdings with this method in our Simply Safe Dividends Subscription. I look forward to using this method for analysis. We appreciate your time and kind consideration with the answer and instructions.
It’s showing a triple bearish divergence on the monthly time frame, so it might still tank with the rest of the market if there’s a crash in the short term. For the long term, I recommend buying into SCHD in a tax deferred account so you don’t have to deal with the tax drag
Rising interest rates held SCHD back, when compared to S&P500, bc yield investors sold it for other income alternatives. As rates fall and those other income options become less appealing, income investors will jump back into SCHD and drive the price higher until its yield reaches approximately 3%
Thanks for watching and sharing your thoughts! No doubt when you look at the surge in money market fund assets, you can't help but think some of that cash will flow back into dividends if / when the Fed's rates come down. I doubt a 0.25% cut or two will do much, but if we see a bigger move over the next year, it could result in a nice bump for dividends. We'll see, but it doesn't matter much if you're in these stocks for their growing payouts over the long run. - Brian
Not too shabby, right? The S&P 500's above-average appreciation has really spoiled us with what a "good" performance is in recent years. Thanks for watching and commenting! - Brian
Even if it just gives 4% dividend growth long term, long term inflation is just 3%. So, that’s still solid for a retiree. As long as those divvies keep increasing, even in a recession, that’s what a retiree needs. I’m thinking huge percentage in SCHD, with smaller amounts in other areas not covered by the fund, like REITS and BDC’s.
Good point - consistently beating the rate of inflation over time is a huge win in retirement, even by just 1% per year. Funds make me a little nervous during recessions since you really have to go under the hood to understand performance and dividend reliability, but it's hard not to like SCHD's selection criteria. Thanks for watching and commenting! - Brian
9:12 I'm sure since it gets reconstituted every March that the fund will add more dividend growth entities that will boost the dividend growth rate up again. The fund seems to juggle between high dividend growth stocks and higher starting yield stocks. Definitely long SCHD!
Thanks for watching and commenting! You're right that the annual reconstitution lifts SCHD's income each year as lower-yielders are replaced by higher-yielders. This year's boost was higher than normal, though. Some years, the portfolio's turnover is quite low (eg < 10%). This March around a quarter of SCHD's positions turned over. Either way, SCHD's methodology is pretty solid for investors looking for stable income and quality companies with a defensive tilt. Brian
@@simplysafedividends Very fair, it was a large turnover this time around. Normally I'm not a fan of high turnover in a portfolio. But the fact that we get the screening process with this ETF for a measly 0.06% expense ratio is beyond me. Long SCHD!
Here's a question, I get it that schd is consistent and pays a 3.5% yield, but wouldn't it be better to have some higher dividend stocks instead, there are tons of individual companies and REITs that pay between 6 and 12%..
Companies that pay higher dividends are less likely to be stable. And REITS pay high dividends, but they are taxed as ordinary income. SCHD pays qualified dividends, so you will only be taxed 10, 15 or 20% max.
Sure but SCHD is tax efficient and well balanced you can get a Reit but unless it’s in a roth it’s taxed ordinary income. As far as other individuals companies go if you do your research it could be a better option but you’re also putting all your eggs in one basket.
Great sober input. If you want more views maybe tie this into current events but I do enjoy clear straight forward advice. You mention AI maybe comparing those schd and nvidia
Thanks so much for your feedback, James! I still feel very new to UA-cam and am all ears for how to produce better content. I like your idea about comparing SCHD and Nvidia and will keep that in mind. Thank you for watching, and I hope you enjoy the rest of your week. - Brian
Heavily considering putting a decent amount of money into SCHD. The concern I have is this would be in a taxable brokerage. Them switching up their holdings: did that cause short term capital gains for those holding it in a taxable brokerage? Thank you
Great question! The short answer is that no, SCHD has not distributed any capital gains for at least the last decade (and I'd guess since the fund's 2011 inception). Unlike some mutual funds, ETFs tend to be very tax-efficient vehicles even when there is turnover from rebalancing. Hope this helps, and thanks for watching! - Brian
That's a perfect reason to own SCHD. Pretty great that the fund's expense ratio (0.06%) is *slightly* less than SPY's (0.09%) and almost as low as VTI's (0.03%). Cheap is cheap, but getting an almost free focus on quality companies - plus some reliable dividends - is quite nice. Thanks for watching and sharing your thoughts! - Brian
SCHD's methodology isn't foolproof as the world changes, but neither is any other investing strategy. If you turn back the clock to early 2018, SCHD held Boeing, Intel, 3M, VF Corp, Leggett & Platt, Macy's, Tupperware, Meredith, Compass Minerals, RRD, and a few other stocks that went on to face trouble and cut their payouts. With rebalancing and a diversified approach, it's comforting to know that these problem holdings weren't enough to really disrupt SCHD's dividend growth or overall total return performance - both were quite acceptable in the years that followed. Thanks for watching and commenting! - Brian
You avoided most cuts but simply downgrading few days or weeks before the cut, when stock was already down 50 or more percent. Your 80 score for MPW make me headaches for two years now and keep going.
Hi Pavol, We gave MPW an "Unsafe" Dividend Safety Score since March 2023. You can see this in the available notes on MPW's company page on our website. Shares have underperformed other REITs (as measured by VNQ) by over 40% since then. It would have been nice to be earlier (to say the least), but there are plenty of other examples where trying to keep a patient, long-term perspective has paid off when a company bounced back. Think of the Very Safe rating we kept on Lowe's during the depths of the pandemic when stores were closing, or our Safe rating on Chevron when its yield approached 10% in late 2020. We definitely won't get every call right, and we won't always be early. But maintaining a well-diversified portfolio and focusing on quality companies with healthier fundamentals is a good recipe to create a sustainable and growing income stream over time. I'm always happy to answer any questions you have, too! Thanks, Brian
Thanks for watching. SCHD's "organic" dividend growth is running closer to 4% this year based on the holdings it has after ~25% of its holdings changed in March, which boosted its initial dividend yield. Even with some rebalancing to pick up higher yield, SCHD's dividend growth could sit well below its 10%+ historical long-term rate based on its current mix of holdings. Not the end of the world - SCHD is still a great fund, but just something for income investors to be aware of. Hope this helps, and thanks for watching! - Brian
I think it's important to remember that thanks to the annual opportunity to change its holdings that SCHD isn't married to the growth of its holdings for dividend growth. Speaking of dividend growth, the purpose of SCHD is dividend growth. So how does it compare to the S&P when it comes to this metric? It's important to know that it's mission isn't to outperform the S&P, it's mission is to provide safe and growing dividends to its customers. So comparing a metric that it's not trying to achieve with an asset who's goal is pure growth would be like dunking on Amazon for their lack of dividend performance 🤷♀️
Very well put! The fund's turnover has varied quite a bit from one year to the next, so we will see what next March brings. Coupled with quarterly rebalancing, which essentially sells (lower-yielding) winners and buys (higher-yielding) smaller positions, I'd expect SCHD's dividend yield and growth to continue outperforming the S&P 500. Total returns are anyone's guess over any given period, but I'd be surprised if they differed that much over the long run. Thanks for watching and commenting! - Brian
If you want dividend growth than buy CEFs. They humiliate SCHD on total generated income and when reinvested, they make multiple times dividend income of SCHD. Good CEF makes more income first year than SPY after 20 years of reinvesting.
I hear you! Out of fairness to our members, we unfortunately haven't ever offered discounts on our service. But our 14-day free trial is completely free with no strings attached, and no credit card required. This can at least give you a chance to evaluate your portfolio and get some actionable ideas. Thanks for watching and commenting! - Brian
There is nothing special about dividend stocks and non-dividend stocks if you sell a small amount of the non-dividend stocks each year. Dividends are just forced stock sales.
Selling stocks instead of receiving dividends is a strategy however you may have to sell when the stock price is down resulting in lower income. High quality dividend paying companies tend to pay increasing dividends even when the market is down. This can help maintain cash flow without having to sell stocks at low market prices or even at a loss.
Thanks for watching and sharing your SCHD strategy! I suspect SCHD's income will continue to steadily rise over the next decade and dwarf the (fixed) income you'd accumulate from most bonds. SCHD's price will probably fall a lot further than most investment-grade bonds whenever the next recession / bear market hits, so investors thinking about viewing SCHD as a bond equivalent should keep that in mind. - Brian
initially did the big ticket buy, 125k into SCHD, 75k TSLA, 25k VYM, 25K VUG. Now I'm dca buying roughly 2k every week of whatever is on sale, and looking to add more tech positions to my portfolio. I'm looking to hold long term 15 - 20 years, so hopefully my lump sum buy in doesn't bite me in the ass long term.
SCHD is more valuable than SCHG as of now, though many people perceive it to be a bubble.
I love SCHD and currently own 2604 shares. I regularly buy more shares, but I also invest in growth stocks/ETFs. Right now, I focus on growth, but I plan to switch to dividend-paying value stocks/ETFs eventually. It’s advisable to engage guidance for a well-diversified portfolio instead of relying solely on speculations. That’s what works for my spouse and I. We've made over 80% capital growth minus dividends.
Hey, I'm trying to find a certified one to boost my investments/portfolio, but it's tough online. Can I get a rec from you, since you know about this stuff?
Jennifer Leigh Hickman is the advisor I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
I own SCHD as I like to sleep at night.
It's one of the best dividend ETFs for that! In case you're curious, last year I reviewed 10 of my favorite dividend ETFs and tried rating each one for dividend safety. Here are my writeups: www.simplysafedividends.com/world-of-dividends/posts/14-2023-best-dividend-etfs-top-10-income-funds-ranked
Thanks for watching!
- Brian
@@simplysafedividends thanks Brian! You have the best content.
Currently own 5k shares of SCHD! This is my retirement fund plus 500 shares of VGT! It's all I need!
Doesn't get much better or simpler than that! Thanks for watching :)
- Brian
I own SCHD. It is a good fit in my portfolio.
Also, if people complain about it then they don’t know what it buys and how.
That’s the problem…people won’t read and do their homework.
I like how they select the stocks, quantity, and low expense costs.
Thanks for watching and commenting! I'm with you - a lot of fund "investors" seem to just look at a fund's recent performance and make a blanket judgement. There's a lot to like with SCHD if you take a few minutes to understand how the fund works.
Best regards,
Brian
To be fair not reading or doing homework is why you dividend invest and buy ETFs to produce income in the first place.
Really good video, Brian. As a holder of SCHD, Im more interested in safety and stability rather than high growth. Appreciate you taking the time to do this.
Thanks for your kind words, Katie! Your goals sound like a great fit for SCHD. That makes it a lot easier to stay the course, even with "safety" and "stability" factors are not in favor by the market - the best time to buy insurance is when others aren't worried about risk.
- Brian
Hey bud can you do an analysis on BTI-MO-BP?
I own SCHD and DGRO. Also a handful of dividend stocks.
Thanks for watching and commenting! I like DGRO a lot, too. It's a little dated, but last year I reviewed 10 of my favorite dividend ETFs (including SCHD and DGRO) in case you're interested. You can find them here: www.simplysafedividends.com/world-of-dividends/posts/14-2023-best-dividend-etfs-top-10-income-funds-ranked
- Brian
SCHD's synthetic dividend growth is based mainly on a buy low sell high concept. But this not only happens during the yearly reconstitution but also the quarterly rebalancing. So for example, LMT and ABBV might be pared back in Sept to 4% and that profit would be allocated to stocks that have gone down like CVX or VZ which have a higher yield than LMT and ABBV.
This. I came here specifically for this comment. The holdings *do* change annually and rebalance quarterly. They regularly trim and even cut their winners, who would no longer have high yields while rolling that money into the higher yielders, which is why it seems odd to call this out as something new to be concerned with. Look at their holdings. When looked at as a portfolio rather than the fund, they've probably never had an average dividend cagr in the 11-14% SCHD investors have grown accustomed to, but that's how the strategy works.
If the goal was *just* stable dividend growth, VYM or VIG are probably better suited, or maybe even SPHD(I can't believe I just suggested SPHD)
Follow-up comment, it's no coincidence June is always a higher dividend than March. March includes the old winners, while June is the first to include the new "value" buys.
That strategy has worked so far.
Great comment, thanks for sharing with the group! You're absolutely right that the monthly dividend reviews and especially the quarterly rebalancing further tops off SCHD's annual dividend growth rate.
I'm curious to explore just how much of a boost that provides. It seems difficult to answer without having a record of quarterly holdings going back more than a couple of years. I know SCHD's turnover rate can fluctuate a good amount one year to the next - some below 10%, some closer to 50%. So the boost from quarterly rebalances might depend on the year with how individual holdings are performing, or perhaps the higher turnover years were driven mostly by the annual rebalance.
I think the rebalance in March was on the higher side, and I'd be surprised if the quarterly rebalances were enough to boost the ~4% organic growth achieved by the holdings this year to something closer to the 10% averaged by SCHD over the long run.
Either way, SCHD's payouts seem likely to keep moving up and to the right, with future rebalancing activity being a big driver of how fast we go.
Thanks again for watching and sharing your insightful comment!
- Brian
Good points! It does make sense that June would usually be higher than March given the rebalancing. (Just to clarify, the 20%+ growth I referenced compared Q224 to Q223).
This year's boost was a relatively big one even from that perspective, though. 2024's Q2 dividend grew 35% from Q1. Here's the sequential growth SCHD saw in past years:
2023: +11%
2022: +36%
2021: +7%
2020: +0% (Covid noise?)
2019: +20% (the year-over-year change was surprisingly low at just 4%)
Probably splitting hairs to some extent. In the future, I'd like to go back to see what the organic growth rate of SCHD's underlying holdings was after those rebalances to compare to the ~4% rate achieved by its current holdings this year.
Thanks again for watching and commenting!
- Brian
When I first subscribed to SSD a few years ago, you were kind enough to give me a call and asked about my reasons for subscribing. I honestly gave a reply that I’m embarrassed about today but my answer was to follow my dividend stocks through your system for a year and verify things in my portfolio to give me confidence in my approach. I did not intend to renew and thought once I thought my portfolio was on point I could put myself in a set it and forget it mode. Needless to say, I am still a subscriber and indeed my holdings are no longer set it and forget it even though I work to keep a low turnover rate and have that as my goal. SSD goes a long way to giving me confidence as an amateur retired investor that gives me much more back in value than what I pay in subscription.
I love SCHD and currently own 604 shares. I do buy shares regularly but I also love growth stocks/ETFs and buy those also. I’m a bit more focused on growth right now but plan to eventually sell those off and replace them with dividend paying value stocks/ETFs.
Sounds like a decent plan to me. Thanks for watching and sharing your strategy with us!
- Brian
A back test of 50/50 SCHG and SCHD has performed like the S&P 500 with a higher yield.
Thanks for watching and sharing your insight on SCHG. I wasn't familiar with that ETF, but I wasn't surprised to see it's a large-cap growth fund. Those have done quite well the last few years and provide a nice complement to SCHD's value tilt (mostly from its prioritization of higher yields). Maintaining a balanced approach is always better than trying to chase what's been hot.
- Brian
Another stella video brian
Thank you
Hey Brian, I've been following information on your website for years now. It's nice to see you starting a UA-cam channel. Thanks for sharing your thoughts on SCHD.
ThanX Brian... Great video.. Long SCHD.... pair it w/ DGRO and JEPI for some cash - Retiree here.... Thanks for your informative & quality videos along with SSD which is excellent for any dividend investor or watcher.... Please be well....
Thanks for watching! A couple other commenters have mentioned they pair SCHD with a growth-focused ETF like DGRO and SCHG. Your addition of JEPI to the mix is interesting, too. I'd like to do a video on covered call funds sometime.
Really glad to hear you are continuing to enjoy SSD! Thank you very much for your support - it means a lot to me and the team. We will always be here if you ever need anything.
Best regards,
Brian
Great video Brian. I'm a long term holding of SCHD so very timely as well. Wish they would have kept AVGO but understand the rebalancing.
AVGO is overvalued. Selling out entirely maybe not a great idea but it certainly should be trimmed.
Thanks, David! I'm glad SCHD was able to get so much upside from AVGO. While I'm usually not a fan of selling winners, I can't be too upset with SCHD exiting AVGO given its historically high valuation multiple and all the enthusiasm behind AI that may not line up as well with the revenue opportunity that emerges the next few years. We will see. Fortunately, SCHD has plenty of other consistent growers in its portfolio.
Thanks again for watching and for your support!
- Brian
Its good that they sold AVGO. I cannot hold any ETF which owns anti value, herd stocks which go up on hype and not fundamentals. I dont like very long periods of going nowhere once music stops and people run for exits. Look at Nike how these stories end.
Fantastic deep dive!
However, I stick to individual stock picking which is made pretty comfortable because of Brian´s dividend one stop service!
Thanks, Thorsten! I think some stock pickers like the "extra" diversification they achieve with a couple of ETFs in their portfolios as well. In my experience (and according to many studies out there), a stock portfolio can be reasonably diversified with as few as 20 to 40 stocks. But managing the behavioral side of investing and finding an approach you can stick with in good times and bad is just as important! Thanks for watching!
- Brian
We started growing a position in $SCHD in our bridge account. We plan on building it up along with $FDVV ETF to as a counterbalance on the markets ups and downs. The plan is to use those 2 dividends generating ETFs for our Bucket 2 in retirement (3 years' worth of expenses) instead of bonds.
Thanks for sharing how you are using SCHD! I've heard a little about FDVV but haven't looked at it closely. I'll check it out. Good luck on your retirement journey!
Thanks for watching,
Brian
@@simplysafedividends It’s a Fidelity passively run low cost ETF that is based on Dividends but doesn’t have the SCHD value stocks aim. The holdings crossover is on 15%. If you compare historical returns, it’s interesting to see the difference when years are up in the S&P 500 with them. Having the combo diversifies even further with the upside of strategic growth.
Paid Subscriber Question: I see that you pulled SCHD up in Your - “Play Portfolio”, and that there are both an ‘Import’ and an ‘Add’ to build that (Play Portfolio);
- Did you Manually Build that SCHD Portfolio ( by Add)
- Or is there a way to ‘Import’ the Holdings of Core ETFs like SCHD, DGRW, MOAT, etc?
( So that we SUBSCRIBERS can Monitor and Evaluate the Holdings in our Core Holdings in addition to the Evaluations that we make on our Satellite or Explore Individual Holdings (stocks)
Thank you for your time and kind consideration in responding . . .
* BTW: Isn’t it tiring and impractical for people to compare SCHD to ‘the Market’ (S&P) when that is not really SCHD’s Benchmark or, more importantly - not the reason that people diversify and/or hold SCHD. Frankly it is to build a more conservative and INCOME producing Portfolio like alternate 80/20, or 70/30 portfolios or ETFs - like FBALX.
* Someone with substantial holdings could - live off of the Income produced by Dividend Growth Portfolios and watch their capital increase for a legacy/family portfolio that weathers the market better and, in addition to funding retirement - is able to fund vacations with grandchildren, their college, weddings, and first home down payments. Aren’t those the goals and objectives of Dividend Growth Portfolios?
1. That's a *lot* for a YT comment.
2. I 100% agree with the "market comparison" point. If you want market returns, buy the market. If you want something else, buy something else.
Hi Tom! Thanks for watching and commenting. Those are great questions.
I downloaded SCHD's holdings using the "Export All Holdings" link found under the Portfolio section on its website here: www.schwabassetmanagement.com/products/schd#portfolio
After opening that spreadsheet, I removed everything but the ticker symbols (kept in column A) and share quantities (kept in column B). Note that you need to check if the downloaded symbols are all relevant - for example, SCHD has a "USD" field that represents cash rather than the tradable security with that ticker symbol.
I then saved that spreadsheet, created a new play portfolio on SSD, and uploaded my SCHD spreadsheet.
I can see how it would be nice to have popular dividend ETFs available as portfolios on the site. We'll keep that in mind and would be happy to help you if you ever would like to see them - just shoot us an email.
I'll also mention that any ETFs you own will be broken out in your portfolio's sector diversification report based on their underlying allocations. That let's you see your overall exposure to tech and other areas including everything you own, not just your individual stocks.
Regarding your final point about comparisons between SCHD and the market - I think your reasoning is spot on, but there is always a big crowd that focuses solely on benchmarking everything against the broader market rather than understanding an individual investor's unique goals. I don't think that will ever change :)
Thank you for your support, and feel free to email us if we can help you get any ETFs loaded as play portfolios in your account.
Best regards,
Brian
@@simplysafedividends Brian: Thank you - for helping me and other Subscribers learn how to use this method to evaluate Core ETF Holdings with this method in our Simply Safe Dividends Subscription. I look forward to using this method for analysis. We appreciate your time and kind consideration with the answer and instructions.
It’s showing a triple bearish divergence on the monthly time frame, so it might still tank with the rest of the market if there’s a crash in the short term. For the long term, I recommend buying into SCHD in a tax deferred account so you don’t have to deal with the tax drag
Good point on the tax-deferred account! Thanks for watching and commenting :)
- Brian
I’m up 18.31% as of February 23 not including dividends and feel super safe. This is a well managed fund and everyone should be involved. 😘
Nice work Brian! I appreciate Simply Safe approach to investing.
As usual, a great video! To the point and addressing the pro's and con's of SCHD.
Thanks, John! Glad you found the video useful!
- Brian
Rising interest rates held SCHD back, when compared to S&P500, bc yield investors sold it for other income alternatives. As rates fall and those other income options become less appealing, income investors will jump back into SCHD and drive the price higher until its yield reaches approximately 3%
Thanks for watching and sharing your thoughts! No doubt when you look at the surge in money market fund assets, you can't help but think some of that cash will flow back into dividends if / when the Fed's rates come down. I doubt a 0.25% cut or two will do much, but if we see a bigger move over the next year, it could result in a nice bump for dividends. We'll see, but it doesn't matter much if you're in these stocks for their growing payouts over the long run.
- Brian
Up 8.7% YTD, 13% over 1 Yr, and 56% over 5 YR
Not too shabby, right? The S&P 500's above-average appreciation has really spoiled us with what a "good" performance is in recent years. Thanks for watching and commenting!
- Brian
Excellent analysis. Very clearly explained. Keep up the great content!
Thanks for your encouragement, Russ! Glad to hear you liked the video :)
- Brian
Even if it just gives 4% dividend growth long term, long term inflation is just 3%. So, that’s still solid for a retiree. As long as those divvies keep increasing, even in a recession, that’s what a retiree needs. I’m thinking huge percentage in SCHD, with smaller amounts in other areas not covered by the fund, like REITS and BDC’s.
Good point - consistently beating the rate of inflation over time is a huge win in retirement, even by just 1% per year. Funds make me a little nervous during recessions since you really have to go under the hood to understand performance and dividend reliability, but it's hard not to like SCHD's selection criteria.
Thanks for watching and commenting!
- Brian
Just curious, what portfolio tracker are you using?
9:12 I'm sure since it gets reconstituted every March that the fund will add more dividend growth entities that will boost the dividend growth rate up again. The fund seems to juggle between high dividend growth stocks and higher starting yield stocks. Definitely long SCHD!
Thanks for watching and commenting! You're right that the annual reconstitution lifts SCHD's income each year as lower-yielders are replaced by higher-yielders. This year's boost was higher than normal, though. Some years, the portfolio's turnover is quite low (eg < 10%). This March around a quarter of SCHD's positions turned over. Either way, SCHD's methodology is pretty solid for investors looking for stable income and quality companies with a defensive tilt.
Brian
@@simplysafedividends Very fair, it was a large turnover this time around. Normally I'm not a fan of high turnover in a portfolio. But the fact that we get the screening process with this ETF for a measly 0.06% expense ratio is beyond me. Long SCHD!
Starting the video by comparing just the share price when SCHD is a dividend ETF is a red flag to me
Here's a question, I get it that schd is consistent and pays a 3.5% yield, but wouldn't it be better to have some higher dividend stocks instead, there are tons of individual companies and REITs that pay between 6 and 12%..
Companies that pay higher dividends are less likely to be stable. And REITS pay high dividends, but they are taxed as ordinary income. SCHD pays qualified dividends, so you will only be taxed 10, 15 or 20% max.
Sure but SCHD is tax efficient and well balanced you can get a Reit but unless it’s in a roth it’s taxed ordinary income. As far as other individuals companies go if you do your research it could be a better option but you’re also putting all your eggs in one basket.
SCHD is for my Roth IRA. i have 20 years until i turn 60. SCHD will grow for me as i make monthly contributions and reinvest my dividendsn
Another gem Brian, thanks!
Thank you! Glad you liked it :)
- Brian
Great sober input. If you want more views maybe tie this into current events but I do enjoy clear straight forward advice. You mention AI maybe comparing those schd and nvidia
Thanks so much for your feedback, James! I still feel very new to UA-cam and am all ears for how to produce better content. I like your idea about comparing SCHD and Nvidia and will keep that in mind. Thank you for watching, and I hope you enjoy the rest of your week.
- Brian
Heavily considering putting a decent amount of money into SCHD. The concern I have is this would be in a taxable brokerage. Them switching up their holdings: did that cause short term capital gains for those holding it in a taxable brokerage? Thank you
Great question! The short answer is that no, SCHD has not distributed any capital gains for at least the last decade (and I'd guess since the fund's 2011 inception). Unlike some mutual funds, ETFs tend to be very tax-efficient vehicles even when there is turnover from rebalancing. Hope this helps, and thanks for watching!
- Brian
@@simplysafedividends thank you!
Great analysis!
Thank you, Bruce! Glad you enjoyed the video :)
- Brian
SCHD is my affordable proxy for large cap Value/Profitability/Quality factors. The dividends are a nice touch, I suppose. 😅
That's a perfect reason to own SCHD. Pretty great that the fund's expense ratio (0.06%) is *slightly* less than SPY's (0.09%) and almost as low as VTI's (0.03%). Cheap is cheap, but getting an almost free focus on quality companies - plus some reliable dividends - is quite nice. Thanks for watching and sharing your thoughts!
- Brian
I did the same 😂 it’s a great value fund…that also pays a nice dividend. Maintain 20% schd in my retirement accounts.
Mostly safe not sure why the unsafe ones got in there …Vail, Cracker Barrel. But there’s always next year.
SCHD's methodology isn't foolproof as the world changes, but neither is any other investing strategy. If you turn back the clock to early 2018, SCHD held Boeing, Intel, 3M, VF Corp, Leggett & Platt, Macy's, Tupperware, Meredith, Compass Minerals, RRD, and a few other stocks that went on to face trouble and cut their payouts.
With rebalancing and a diversified approach, it's comforting to know that these problem holdings weren't enough to really disrupt SCHD's dividend growth or overall total return performance - both were quite acceptable in the years that followed.
Thanks for watching and commenting!
- Brian
@@simplysafedividends yes agree 👍 thank you for the informative video and analysis.
well done, m8.
Thanks for your compliment and for watching - really appreciate it :)
- Brian
You avoided most cuts but simply downgrading few days or weeks before the cut, when stock was already down 50 or more percent. Your 80 score for MPW make me headaches for two years now and keep going.
Hi Pavol,
We gave MPW an "Unsafe" Dividend Safety Score since March 2023. You can see this in the available notes on MPW's company page on our website. Shares have underperformed other REITs (as measured by VNQ) by over 40% since then.
It would have been nice to be earlier (to say the least), but there are plenty of other examples where trying to keep a patient, long-term perspective has paid off when a company bounced back. Think of the Very Safe rating we kept on Lowe's during the depths of the pandemic when stores were closing, or our Safe rating on Chevron when its yield approached 10% in late 2020.
We definitely won't get every call right, and we won't always be early. But maintaining a well-diversified portfolio and focusing on quality companies with healthier fundamentals is a good recipe to create a sustainable and growing income stream over time.
I'm always happy to answer any questions you have, too!
Thanks,
Brian
I have a lot SCHD but bought more ETFs that are lower priced and they far better dividends monthly.
Such as?
So, what's the uncomfortable truth? At what point was this answered? I didn't hear the answer.
Thanks for watching. SCHD's "organic" dividend growth is running closer to 4% this year based on the holdings it has after ~25% of its holdings changed in March, which boosted its initial dividend yield. Even with some rebalancing to pick up higher yield, SCHD's dividend growth could sit well below its 10%+ historical long-term rate based on its current mix of holdings. Not the end of the world - SCHD is still a great fund, but just something for income investors to be aware of. Hope this helps, and thanks for watching!
- Brian
3m is going to blow back up
I just buy $VT :)
I think it's important to remember that thanks to the annual opportunity to change its holdings that SCHD isn't married to the growth of its holdings for dividend growth.
Speaking of dividend growth, the purpose of SCHD is dividend growth. So how does it compare to the S&P when it comes to this metric? It's important to know that it's mission isn't to outperform the S&P, it's mission is to provide safe and growing dividends to its customers. So comparing a metric that it's not trying to achieve with an asset who's goal is pure growth would be like dunking on Amazon for their lack of dividend performance 🤷♀️
Very well put! The fund's turnover has varied quite a bit from one year to the next, so we will see what next March brings. Coupled with quarterly rebalancing, which essentially sells (lower-yielding) winners and buys (higher-yielding) smaller positions, I'd expect SCHD's dividend yield and growth to continue outperforming the S&P 500. Total returns are anyone's guess over any given period, but I'd be surprised if they differed that much over the long run.
Thanks for watching and commenting!
- Brian
If you want dividend growth than buy CEFs. They humiliate SCHD on total generated income and when reinvested, they make multiple times dividend income of SCHD. Good CEF makes more income first year than SPY after 20 years of reinvesting.
I would love a free annual subscription 🙏
Nothing free in this world Jake
- Denzel Washington, aka Alonzo Harris
I hear you! Out of fairness to our members, we unfortunately haven't ever offered discounts on our service. But our 14-day free trial is completely free with no strings attached, and no credit card required. This can at least give you a chance to evaluate your portfolio and get some actionable ideas.
Thanks for watching and commenting!
- Brian
SCHD or SPY. I call it The NERDS ETF. lol
There is nothing special about dividend stocks and non-dividend stocks if you sell a small amount of the non-dividend stocks each year. Dividends are just forced stock sales.
Selling stocks instead of receiving dividends is a strategy however you may have to sell when the stock price is down resulting in lower income. High quality dividend paying companies tend to pay increasing dividends even when the market is down. This can help maintain cash flow without having to sell stocks at low market prices or even at a loss.
I choose SCHD as my bond equivalent. I've been very happy with that choice for stability and increasing dividends each year.
Thanks for watching and sharing your SCHD strategy! I suspect SCHD's income will continue to steadily rise over the next decade and dwarf the (fixed) income you'd accumulate from most bonds. SCHD's price will probably fall a lot further than most investment-grade bonds whenever the next recession / bear market hits, so investors thinking about viewing SCHD as a bond equivalent should keep that in mind.
- Brian
Right. I'm doing the same.