Love your videos Jeff! What do you think about mixing in some BRK.B (maybe 10%-15%) as a hedge against potential over-valued prices on VOO and VGT or VUG). I am mostly in your 1/3rd Growth, 1/3rd Market and 1/3rd SCHD.
Hey Brian. I think mixing in BRK.B is a great move. That one is 'VOO-like' to me in the sense that I don't think there is such thing as too much or too little. 1%? Sure. 50%? That works. I fully trust in Buffett and his succession plan.
Absolutely, thank you for taking the time to watch it. Sometimes it is easy to get caught up in the moment in a hot market. I think it's a good idea to consider balance and stay the course at all times.
Thanks Vikram. I appreciate the kind words and I have to agree, these simple principles are more important than 99% of the news and 'takes' that we here both on UA-cam and the Internet in general.
Great topic Jeff. I have set up an excel spreadsheet that uses the current price of my ETFs, how many shares I own, and the percentage ratio of each. It lets me know the dollar amount i need to add to keep it balanced. I can add money daily, weekly or whenever i choose. When i see a major market change, i will go check what is down and add to it by buying the dip relative to the other etfs. I'm not sure how others maintain their percentage balance but i don't need to do any math and it works for me. My instincts would be to buy whatever is low for the day but often i discover just because VGT dropped today doesn't mean i need to buy it relative to SCHD or VOO. I love taking my emotions and gut reactions out of the buying process. Thanks for your insights, ideas and guidance.
I use Rob Bergers Free Investment Tracking Spreadsheet. I'm sure you have seen it but some members might benefit from it or something you might have that is similar.
Hey Roy. Man, you seriously have a way of explaining what I try to portray better than I can! (: Seriously, this system is a great way to go about it. I try to get people I work with to do something similar. Even if it is basic and at a high level (update monthly, put new money to get back to targets). Over time it will save us from rebalancing as often but also have a nice balance of letting our winners run a little (like VGT lately). I love new dollars going to the dip, but I'm not a sell to rebalance all the time kind of guy. At lot of this stuff doesn't have a 'perfect' answer as far as specific timing, but sticking to the overall system is objectively the way to go. It will save us from ourselves in the hard times. Thanks for watching, learning, and teaching. You have been awesome for this community.
Hey Roy. I watch Rob all the time. He's great. I haven't actually downloaded the spreadsheet. I will check it out! I typically use my 'allocations' tab on my portfolio tracker to see my weightings every Friday. But always like to see what other people do.
@JeffTeeples well when you are too big for your britches, you can hire me on to the Teeples team and I would love to answer all the questions in comments. Then you could focus on creating more content and build a larger base that could lead to group video chat or anything else to help more people with more involvement. 😀
I appreciate that Druski. I'm probably not going to break any records for being exciting or clickbaity, *but*, I'm here to help with the things that will *actually* help people build wealth long-term and take control of their finances. Thanks for your consistent support!
Haha, thanks slammer. I try to implement this stuff in a lot of my videos (without being toooooo repetitive) because it really is what matters. Simplicity and consistency dominate the investing game long-term. Even a guy like me can figure it out (: Thanks for watching and for all your support.
It's a solid book. I know a lot of investing purist tell him to stick to self-help and blah blah, but I don't buy it. I learn a lot from all kinds of books on investing and otherwise. We need to stay open-minded to continue growing in life. Sometimes I think sources outside the 'main experts' have interesting points that work even better for the common person. Lebron James telling me to just go dunk the ball over 3 people in that situation will not help *me* lol
Jeff, how often should someone rebalance? monthly, quarterly, 6 months or yearly? Is it better to do it at the end/beginning of the quarters (if doing quarterly) or the middle? I appreciate your advice!
This is a great question that doesn't have a *correct* answer. I've seen smart investors prefer anywhere from monthly to quarterly to annually. Historically I didn't have to rebalance very often because I used to make good money before quitting my job to start this channel. I would DCA my new money in each week, and buy the one that was the furthest away from its target (bad recent performance to buy the relative dip). I think I lean towards rebalancing as much real-time with new contributions based on target allocations, then doing an official rebalance annually. I think this gives the winners a little leash to run while still keeping everything balanced long-term. I think quarterly is just as good. Really depends on style and preference.
Great video! In this video and your other videos about rebalancing the target allocation, you talk about adding new money to adjust the target allocation. Could you also address the scenario where there is no new money to invest which is typically the case when you are retired. How do you adjust the target allocation in that case.
Hey Reetesh. Great question. In retirement, it will be the same, only opposite. When you make a withdrawal you'll want to sell the one that is the furthest *above* it's target allocation to get it back *down* to its target weight. You can also rebalance annually (or whatever is comfortable) to get everything back in balance if you aren't drawing it down enough to keep it balanced.
Thank you Jeff. I love the balancing spreadsheet. I was starting to make my own and decided to see if you shared a link. I see you have shared a bunch of your Google Sheets. Will you be adding this one to the list. Otherwise I guess it is a good challenge for me to figure out the math myself. Ha. Thanks again. I'm Subscribed.
Hey David. That is a great idea. I will simplify the spreadsheet a bit to make it more user friendly and then get a copy out there. It may be a couple weeks from now because I have a few things coming up, but I'll put it on my todo. Thanks!
This is a tough question because we are all so different. I think 'most' in their 50's and 60's would prefer more dividend producing ETFs like SCHD over the growth ETFs of the world. I will likely have about 50% to 75% SCHD at that point, and then the rest will be a mix of VOO, VT, and VGT. But I'm trying to maximize cash-flow and I don't mind falling short of the market's returns. It really depends on the person and their goals.
Question, lets say you have like enough money to buy 75 dollars into schd, 75 into voo, 75 vgt every week on auto invest like every Tuesday. Just set it and forget, would that perform a lot worse than constantly managing and trying to have them be equal % of the total portfolio?
Hey Oldrin. That would perform just fine. In many cases, it would do even better short-term as one of the holdings has a nice run. If you do it that way I would highly recommend an annual rebalance (especially in tax protected accounts like 401k, IRA, Roth, HSA, etc) to keep your portfolio prepared for all situations. We never know when the big crash is coming. It is different every time. People will say buying target weights or rebalancing is for fools, until its not (:
GREAT video Jeff... well said.. Great advice.... Rebalancing to me seems very tricky as I have an overall master plan covering the total holdings spread out over five accounts vs something like one account.... I shall work diligently to get it done.. I know I am in the neighborhood and I do grab when I can grab shares... Thanks again for a great video.... Onward 20k subs....!!!!
Thanks Lance. I appreciate all your feedback. You're a staple to this community and it makes it fun for me to make more videos. 20k subs would be incredible. My pace has been slowing down quite a bit, but I'm not losing faith. I slowly merged a variety of platforms into E*Trade (outside of the HODL Factory in M1 and work accounts, I'm done). I had individual stocks as well that I slowly rolled into the ETF setup over 3 years (to spread out the long-term capital gains). It feels so nice to have everything simplified. I love the HODL Factory, but I would be lying if I said that part of me didn't want to roll it into the few ETFs for simplicity (: I will continue it for at least 3 years, and if it wins that timeline, we'll go for 5 (2 more). At that point, if it is still outperforming, I may put A LOT into it. If not, it could get sold and rolled into E*Trade pre-retirement.
I don't think that's a bad idea right now. It really depends on what your current portfolio mix is compared to your target allocations. If you stick to a system of X% each in general, then you would naturally be buying more SCHD and VOO lately. For example, if you had a goal of 25% each, *right now* SCHG and QQQM would likely be overweight because they have gone way up. In that case, your new dollars should go to SCHD and VOO. This is just an example of course, but be sure to make 'target weights' for each holding. This way you put your new dollars into the most beat up ones (getting more bang for your buck instead of buying high on average).
I consider VNQ a solid REIT index to be certain, but I do not see it as an option for me personally compared to SCHD. That isn't to say it is bad, I'm just not a REIT guy in general. I do like them *waaaaay* better than bonds though (:
Great grounding video! When you say “buy the dip that’s underweight “, is there some kind of settings in vanguard or fidelity that does it automatically? Or any other app? Or do you do it manually?
Hey George. That is a great question! In E*Trade I have to do it manually (I update my portfolio tracking spreadsheet weekly and use it to make purchasing decisions. One of the tabs shows my current allocations). In M1 Finance the system buys the underweight positions automatically (you set target allocations and just feed it money). I love M1 for that. Vanguard and Fidelity are more like E*Trade by default. However, Fidelity does now have 'baskets' that work similar to the pie system of M1 Finance. It is $5 per month to use on Fidelity. I know this through my friend. I personally use E*Trade and M1.
To my knowledge VMSXX is a safe investment. I personally use VMFXX (but that doesn't save the taxes) and am considering SGOV after researching it further. I haven't done a deep dive on VMSXX to see the risks, but everything I have read over the years points to it being a safe option for cash.
Jeff, I am moving closer to your strategy with my ETFs. I like your strategy and I'm looking to simplify the ETF portion of my investments. I have a couple semiconductor ETFs I am going to sell once they increase by 30% and split the proceeds into SCHD, dgro and VGT. Do you think setting price targets is a good way of setting an exit strategy? Have a good Sunday!
Hey Chris. I think you have a great plan of attack there. I used limit prices for my buying and selling in the past. I don't do it anymore. If I'm selling something to change it to something else, I log on, sell, and then immediately buy the other. I like to eliminate all 'timing' of my portfolio management these days.
Hi Jeff, I have been advocating SCHD for my kids Roth IRA (they are 20 yrs. Old). When I run the numbers at a 40 yr projection, with DRIP and no taxes, the returns start getting insane as it eventually goes exponential. It also seems like a good strategy to maintain a ROTH contribution (via DRIP) even as a person’s income starts to disqualify them for Roth contributions. Do you have any thoughts on this? Are there any other considerations I might be missing? (Other than diversification). I would love your feedback and appreciate the great work you do on this channel.
Hey Joel. I think SCHD is great for all ages. Everything you said is why SCHD is a strong candidate for a Roth IRA (and for a taxable account too because the dividends are qualified). I will say that for people that are 20, I would recommend growth and a good cornerstone as well. My favorites for growth are VGT, QQQM, or SCHG. My favorite cornerstone (which is really just a hybrid of growth and value) is VOO or VTI. The logic is similar to the SCHD but for growth. If VGT, which is 100% tech, has an absolute crash of 75%, that is going my make a young person very wealthy long-term. If the price used to be $500 per share, and now it's $125 per share after a huge crash, every contribution is buying that many more shares. And when we zoom out quality growth ETFs have done very well for over 50 years. That's not to say you *have* to have a mix of growth, value (SCHD) and cornerstone (VOO) in a portfolio, but I do think it is a good idea personally. All that said, yes, SCHD will have stable compound growth over many decades. The dividend growth is incredible as well. I plan to be 'very heavy' in SCHD when I retire (and even before, I'm already 33% SCHD now).
People were worried about the same thing ten years ago. And to be honest, if the market is flat the next ten years is a huge win for you. Means you're buying low and when there's a turnaround you'll do even better in retirement.
I hear you, but I completely agree with international_dividend's comment below. Technically it would be a good thing in the accumulation stage to have it flat or down. You're swooping up more shares per dollar you put in. Long-term the market usually returns ~10%. When it is beat up in a lost decade is when people get rich. Side note: The bond lovers that say 'SEE!!' in a bad market always make me laugh (assuming there is still many years of accumulation remaining). They have it backwards, and bonds absolutely obliterate wealth in all markets for over 100 years to the tune of 5% annually. Now, retirement is a different story. I still don't like bonds there, but I at least understand the arguments for them.
what about 100% in SCHD? I'm still about 33% in SCHD and 33% in SPYI currently. The rest are in some individual dividend stocks such as MAIN, CSWC, etc.
I personally think 100% SCHD is a solid move, especially in retirement. It is 100 very well diversified companies form a sector perspective. They are also high quality companies because SCHD doesn't only look at dividend stats. It considers cash flow, return on equity, and low debt as well. Clean balance sheets. Of course you won't always 'beat the market', but the consistent growth of the value and dividends will build stable wealth and dominate inflation long-term.
That one isn't out there, but I'll work on getting a clean and easy to use one out there soon. Will probably be a couple weeks but I'll put it on the list of things. Thanks!
Hey Paul. Do you mean what ETFs to invest in to stay ahead of inflation? Ironically, I think VOO and SCHD are the two best when looking ahead 20 to 50 years. I say ironically because this isn't necessarily why I choose them, but it is 2/3rds of my portfolio.
Exactly! lol. I love it when people talk like that about Buffett. I just laugh to myself and shake my head. It think it is safe to say that he hasn't lost it & that he knows a lot about investing (:
I think buying an international ETF is a fine move. I would make it a target allocation within your mix and buy up to that point. Once it gets there, buy the most underweight position with each new contribution.
I'm not a huge fan of high yield income ETFs in general. I think the underlying index (pre-call options) will grow more 99.9% of the time for an investor that is DCA in over time. However, for a retiree that needs cash-flow, high yielding options will be necessary. In that case, I put a high importance on expense ratios (that money goes poof forever, the the opportunity cost compounds in a negative way) and quality indexes. JEPQ is my favorite for it's 35 basis points ER, which is low for a high yielding ETF, and the Nasdaq-100 is great for options (more volatile than something like JEPI, and therefore more income in your pockets). Something like QDTE will cost 6 or 7 figures, long-term, on the compounding costs of the 95 basis point expense ratio alone. That is before considering lower ceilings from the derivatives. The net math always plays out with every investing option. Sometimes people get enamored with big yield numbers, but that 'cost' is baked into returns by default. I'm not saying high yield is always bad, but it's never free. QQQM will beat JEPQ on total returns long-term. It is almost mathematically impossible for that not to be the case (assuming the market goes up in the next 10, 20, 30+ years). But if you need more income *now*, JEPQ may be *better* for you.
Just wondering what your thoughts thoughts are about Goldman Sachs saying there’s only gonna be 3% growth each year for the next decade, where should we put our money?
I'm not Jeff but following the mindset of "always buy" means we don't listen to the media noise. Stay the course and buy monthly/weekly until retirement. If your emotions guide you, you will lose or underperform. If we listen to advice pulling us off course, we will take longer to get to our destination. If GS is right, then all your buys will be great because your buying low. If GS is wrong and you keep buying your target allocations, you will always be buying the dip.
Hey Jeff. I think Roy nailed it with his answer to this one. We've been hearing about low returns coming for over a decade now. Seriously, since after the recovery bull from from the financial crisis. The last decade has been one of the better ones in a long time. I'm glad I kept buying. Now, if it really does only gain 3% per year, or even becomes a lost decade, then buying all the time will make us even more wealthy when we zoom out and the average gets 'back to' 10% over a longer stretch of time. Of course, if retired, these spikes may need to be addressed because the accumulation stage is over. But if we set target allocations that make sense for age, goals, and timelines, then it is virtually impossible to lose with target allocations (assuming quality holdings in general for each category).
Despite the news reports, GS said between minus 1 and 7 percent, but everyone ruining with the average. So if GS high end is right, 7% isn't too far from the historical average. In other words, nothing to see here and keep on buying.
The headlines cherry picked one thing from the GS report. If you read the actual report or a more detailed summary of it, GS said they expect the cap-weighted 500 to be 3.5% over the next decade. But they also said they expect the equal weighted 500 to outperform that by up to 8%. GS isn’t forecasting a bad decade, they just think the 500 will adjust back to a more normal distribution of cap weight after the recent explosion of the magnificent 7. If you believe their thesis then an equal weighted ETF such as RSP is a good bet to have in your portfolio alongside the usual VOO or SPY.
Thanks!
Hey Brianna. Thank YOU for being so generous and a pillar to this community. I appreciate it!
@@JeffTeeplesi understand SCHD split, can you explain why it isn’t split half way? How do they decide on the current price now?
Hey Brianna. We caught up on this one already, but let me know if you have anymore questions. I didn't see this until just now.
Love your videos Jeff! What do you think about mixing in some BRK.B (maybe 10%-15%) as a hedge against potential over-valued prices on VOO and VGT or VUG). I am mostly in your 1/3rd Growth, 1/3rd Market and 1/3rd SCHD.
Hey Brian. I think mixing in BRK.B is a great move. That one is 'VOO-like' to me in the sense that I don't think there is such thing as too much or too little. 1%? Sure. 50%? That works. I fully trust in Buffett and his succession plan.
JT, thanks again for the timely video during this crazy bull market time.
Absolutely, thank you for taking the time to watch it. Sometimes it is easy to get caught up in the moment in a hot market. I think it's a good idea to consider balance and stay the course at all times.
This video should be the base for any early investors. Such powerful concepts delivered in a simple message. 1) start now 2) stay always 3) die rich 😅
Thanks Vikram. I appreciate the kind words and I have to agree, these simple principles are more important than 99% of the news and 'takes' that we here both on UA-cam and the Internet in general.
Sage advice Jeff! Keep it coming!
Thanks John! Will do. I appreciate you taking the time to watch the video.
Great topic Jeff. I have set up an excel spreadsheet that uses the current price of my ETFs, how many shares I own, and the percentage ratio of each. It lets me know the dollar amount i need to add to keep it balanced. I can add money daily, weekly or whenever i choose. When i see a major market change, i will go check what is down and add to it by buying the dip relative to the other etfs. I'm not sure how others maintain their percentage balance but i don't need to do any math and it works for me. My instincts would be to buy whatever is low for the day but often i discover just because VGT dropped today doesn't mean i need to buy it relative to SCHD or VOO. I love taking my emotions and gut reactions out of the buying process. Thanks for your insights, ideas and guidance.
I use Rob Bergers Free Investment Tracking Spreadsheet. I'm sure you have seen it but some members might benefit from it or something you might have that is similar.
Hey Roy. Man, you seriously have a way of explaining what I try to portray better than I can! (: Seriously, this system is a great way to go about it. I try to get people I work with to do something similar. Even if it is basic and at a high level (update monthly, put new money to get back to targets).
Over time it will save us from rebalancing as often but also have a nice balance of letting our winners run a little (like VGT lately). I love new dollars going to the dip, but I'm not a sell to rebalance all the time kind of guy.
At lot of this stuff doesn't have a 'perfect' answer as far as specific timing, but sticking to the overall system is objectively the way to go. It will save us from ourselves in the hard times.
Thanks for watching, learning, and teaching. You have been awesome for this community.
Hey Roy. I watch Rob all the time. He's great. I haven't actually downloaded the spreadsheet. I will check it out! I typically use my 'allocations' tab on my portfolio tracker to see my weightings every Friday. But always like to see what other people do.
@JeffTeeples well when you are too big for your britches, you can hire me on to the Teeples team and I would love to answer all the questions in comments. Then you could focus on creating more content and build a larger base that could lead to group video chat or anything else to help more people with more involvement. 😀
Excellent show again! I look forward to your shows
I appreciate that Druski. I'm probably not going to break any records for being exciting or clickbaity, *but*, I'm here to help with the things that will *actually* help people build wealth long-term and take control of their finances. Thanks for your consistent support!
keep pumping out those financial informational videos Jeff!!!!
Will do Kevin. Thanks as always for your support!
Great video, thanks Jeff!
Thank you for taking the time to watch the video and for leaving positive feedback. Much appreciated!
Perfect video for my four-hr flight today. DCA'ing every Mon after your Sun video.👍
I love that system. Monday is my main day for making moves as well (in general). Thanks for watching!
Another good one, Jeff, thanks!
Thanks Alex. I appreciate your consistent support and feedback for the channel.
This is a good reminder. Can you just republish this video every week. I'll hit like every time!!
Haha, thanks slammer. I try to implement this stuff in a lot of my videos (without being toooooo repetitive) because it really is what matters. Simplicity and consistency dominate the investing game long-term. Even a guy like me can figure it out (:
Thanks for watching and for all your support.
Every Sunday at 9am is Teeples Time! I love it! 😁
I had to get back to those roots! I'll still drop an extra video here and there, but gotta hit at least most Sundays.
That Tony Robbins book helped get me into investing in ETFs on my own as well.
It's a solid book. I know a lot of investing purist tell him to stick to self-help and blah blah, but I don't buy it. I learn a lot from all kinds of books on investing and otherwise. We need to stay open-minded to continue growing in life. Sometimes I think sources outside the 'main experts' have interesting points that work even better for the common person.
Lebron James telling me to just go dunk the ball over 3 people in that situation will not help *me* lol
Jeff, how often should someone rebalance? monthly, quarterly, 6 months or yearly? Is it better to do it at the end/beginning of the quarters (if doing quarterly) or the middle? I appreciate your advice!
This is a great question that doesn't have a *correct* answer. I've seen smart investors prefer anywhere from monthly to quarterly to annually.
Historically I didn't have to rebalance very often because I used to make good money before quitting my job to start this channel. I would DCA my new money in each week, and buy the one that was the furthest away from its target (bad recent performance to buy the relative dip).
I think I lean towards rebalancing as much real-time with new contributions based on target allocations, then doing an official rebalance annually. I think this gives the winners a little leash to run while still keeping everything balanced long-term. I think quarterly is just as good. Really depends on style and preference.
Great straightforward advice
Thanks for watching and for the positive feedback.
Great video thank you.
Thanks for taking the time to watch, Rigo. I appreciate the positive feedback.
Great video! In this video and your other videos about rebalancing the target allocation, you talk about adding new money to adjust the target allocation. Could you also address the scenario where there is no new money to invest which is typically the case when you are retired. How do you adjust the target allocation in that case.
Hey Reetesh. Great question. In retirement, it will be the same, only opposite. When you make a withdrawal you'll want to sell the one that is the furthest *above* it's target allocation to get it back *down* to its target weight.
You can also rebalance annually (or whatever is comfortable) to get everything back in balance if you aren't drawing it down enough to keep it balanced.
Thank you Jeff. I love the balancing spreadsheet. I was starting to make my own and decided to see if you shared a link. I see you have shared a bunch of your Google Sheets. Will you be adding this one to the list. Otherwise I guess it is a good challenge for me to figure out the math myself. Ha. Thanks again. I'm Subscribed.
Hey David. That is a great idea. I will simplify the spreadsheet a bit to make it more user friendly and then get a copy out there. It may be a couple weeks from now because I have a few things coming up, but I'll put it on my todo. Thanks!
Hi Jeff, what should a target allocation portfolio look like for people in their 50's-60's?
This is a tough question because we are all so different. I think 'most' in their 50's and 60's would prefer more dividend producing ETFs like SCHD over the growth ETFs of the world.
I will likely have about 50% to 75% SCHD at that point, and then the rest will be a mix of VOO, VT, and VGT. But I'm trying to maximize cash-flow and I don't mind falling short of the market's returns. It really depends on the person and their goals.
Question, lets say you have like enough money to buy 75 dollars into schd, 75 into voo, 75 vgt every week on auto invest like every Tuesday. Just set it and forget, would that perform a lot worse than constantly managing and trying to have them be equal % of the total portfolio?
Hey Oldrin. That would perform just fine. In many cases, it would do even better short-term as one of the holdings has a nice run.
If you do it that way I would highly recommend an annual rebalance (especially in tax protected accounts like 401k, IRA, Roth, HSA, etc) to keep your portfolio prepared for all situations. We never know when the big crash is coming. It is different every time. People will say buying target weights or rebalancing is for fools, until its not (:
@@JeffTeeples Thank you for the reply. Appreciate your insights!!
GREAT video Jeff... well said.. Great advice.... Rebalancing to me seems very tricky as I have an overall master plan covering the total holdings spread out over five accounts vs something like one account.... I shall work diligently to get it done.. I know I am in the neighborhood and I do grab when I can grab shares... Thanks again for a great video.... Onward 20k subs....!!!!
Thanks Lance. I appreciate all your feedback. You're a staple to this community and it makes it fun for me to make more videos. 20k subs would be incredible. My pace has been slowing down quite a bit, but I'm not losing faith.
I slowly merged a variety of platforms into E*Trade (outside of the HODL Factory in M1 and work accounts, I'm done). I had individual stocks as well that I slowly rolled into the ETF setup over 3 years (to spread out the long-term capital gains).
It feels so nice to have everything simplified. I love the HODL Factory, but I would be lying if I said that part of me didn't want to roll it into the few ETFs for simplicity (: I will continue it for at least 3 years, and if it wins that timeline, we'll go for 5 (2 more). At that point, if it is still outperforming, I may put A LOT into it. If not, it could get sold and rolled into E*Trade pre-retirement.
If im 25 and want to own schg and qqqm. I should prob let it drop some though and in the meantime add to my VOO position and SCHD??
I don't think that's a bad idea right now. It really depends on what your current portfolio mix is compared to your target allocations.
If you stick to a system of X% each in general, then you would naturally be buying more SCHD and VOO lately.
For example, if you had a goal of 25% each, *right now* SCHG and QQQM would likely be overweight because they have gone way up. In that case, your new dollars should go to SCHD and VOO. This is just an example of course, but be sure to make 'target weights' for each holding. This way you put your new dollars into the most beat up ones (getting more bang for your buck instead of buying high on average).
Would you consider VNQ equivalent to SCHD?
Be careful VNQ’s div income will NOT be qualified. SCHD divs are qualified so much different taxes.
I consider VNQ a solid REIT index to be certain, but I do not see it as an option for me personally compared to SCHD. That isn't to say it is bad, I'm just not a REIT guy in general. I do like them *waaaaay* better than bonds though (:
This is one of the things I don't like about REITs. If I held one, probably this or O, it would be in a tax protected account.
Great grounding video!
When you say “buy the dip that’s underweight “, is there some kind of settings in vanguard or fidelity that does it automatically? Or any other app? Or do you do it manually?
Hey George. That is a great question! In E*Trade I have to do it manually (I update my portfolio tracking spreadsheet weekly and use it to make purchasing decisions. One of the tabs shows my current allocations). In M1 Finance the system buys the underweight positions automatically (you set target allocations and just feed it money). I love M1 for that.
Vanguard and Fidelity are more like E*Trade by default. However, Fidelity does now have 'baskets' that work similar to the pie system of M1 Finance. It is $5 per month to use on Fidelity. I know this through my friend. I personally use E*Trade and M1.
Has VMSXX ever decreased in value? I am in the highest tax bracket and looking for a relatively safe place to park my after tax cash.
To my knowledge VMSXX is a safe investment. I personally use VMFXX (but that doesn't save the taxes) and am considering SGOV after researching it further. I haven't done a deep dive on VMSXX to see the risks, but everything I have read over the years points to it being a safe option for cash.
@@JeffTeeplesThank you!
Jeff, I am moving closer to your strategy with my ETFs. I like your strategy and I'm looking to simplify the ETF portion of my investments. I have a couple semiconductor ETFs I am going to sell once they increase by 30% and split the proceeds into SCHD, dgro and VGT. Do you think setting price targets is a good way of setting an exit strategy? Have a good Sunday!
Hey Chris. I think you have a great plan of attack there. I used limit prices for my buying and selling in the past. I don't do it anymore.
If I'm selling something to change it to something else, I log on, sell, and then immediately buy the other. I like to eliminate all 'timing' of my portfolio management these days.
Hi Jeff, I have been advocating SCHD for my kids Roth IRA (they are 20 yrs. Old). When I run the numbers at a 40 yr projection, with DRIP and no taxes, the returns start getting insane as it eventually goes exponential. It also seems like a good strategy to maintain a ROTH contribution (via DRIP) even as a person’s income starts to disqualify them for Roth contributions. Do you have any thoughts on this? Are there any other considerations I might be missing? (Other than diversification). I would love your feedback and appreciate the great work you do on this channel.
Hey Joel. I think SCHD is great for all ages. Everything you said is why SCHD is a strong candidate for a Roth IRA (and for a taxable account too because the dividends are qualified).
I will say that for people that are 20, I would recommend growth and a good cornerstone as well. My favorites for growth are VGT, QQQM, or SCHG. My favorite cornerstone (which is really just a hybrid of growth and value) is VOO or VTI.
The logic is similar to the SCHD but for growth. If VGT, which is 100% tech, has an absolute crash of 75%, that is going my make a young person very wealthy long-term. If the price used to be $500 per share, and now it's $125 per share after a huge crash, every contribution is buying that many more shares. And when we zoom out quality growth ETFs have done very well for over 50 years.
That's not to say you *have* to have a mix of growth, value (SCHD) and cornerstone (VOO) in a portfolio, but I do think it is a good idea personally.
All that said, yes, SCHD will have stable compound growth over many decades. The dividend growth is incredible as well. I plan to be 'very heavy' in SCHD when I retire (and even before, I'm already 33% SCHD now).
10 years out from retirement…I’m nervous about a stagnant market for the rest of my portfolio building years.
People were worried about the same thing ten years ago.
And to be honest, if the market is flat the next ten years is a huge win for you. Means you're buying low and when there's a turnaround you'll do even better in retirement.
I hear you, but I completely agree with international_dividend's comment below. Technically it would be a good thing in the accumulation stage to have it flat or down. You're swooping up more shares per dollar you put in. Long-term the market usually returns ~10%. When it is beat up in a lost decade is when people get rich.
Side note: The bond lovers that say 'SEE!!' in a bad market always make me laugh (assuming there is still many years of accumulation remaining). They have it backwards, and bonds absolutely obliterate wealth in all markets for over 100 years to the tune of 5% annually. Now, retirement is a different story. I still don't like bonds there, but I at least understand the arguments for them.
what about 100% in SCHD? I'm still about 33% in SCHD and 33% in SPYI currently. The rest are in some individual dividend stocks such as MAIN, CSWC, etc.
I personally think 100% SCHD is a solid move, especially in retirement. It is 100 very well diversified companies form a sector perspective. They are also high quality companies because SCHD doesn't only look at dividend stats. It considers cash flow, return on equity, and low debt as well. Clean balance sheets.
Of course you won't always 'beat the market', but the consistent growth of the value and dividends will build stable wealth and dominate inflation long-term.
@@JeffTeeples Yes I like that very much so. Dominating inflation long term. Thanks!
How do we use that tool u used
That one isn't out there, but I'll work on getting a clean and easy to use one out there soon. Will probably be a couple weeks but I'll put it on the list of things. Thanks!
@@JeffTeeples thank you!
Please do video about ETF to avoid USA inflation
Hey Paul. Do you mean what ETFs to invest in to stay ahead of inflation? Ironically, I think VOO and SCHD are the two best when looking ahead 20 to 50 years. I say ironically because this isn't necessarily why I choose them, but it is 2/3rds of my portfolio.
@@JeffTeeples thank you. I mean sovereign debt crisis in USA, very high inflation only in usa
Imagine saying Buffett, who’s one of the world’s richest people that gives away $4 billion every year doesn’t know what he’s doing! People crack me up
Exactly! lol. I love it when people talk like that about Buffett. I just laugh to myself and shake my head. It think it is safe to say that he hasn't lost it & that he knows a lot about investing (:
Everything is as it peak nothing to buy ETF wise I'm buying international ETF these days what do u think? Maybe ETF comparison for intl ETF?
I think buying an international ETF is a fine move. I would make it a target allocation within your mix and buy up to that point. Once it gets there, buy the most underweight position with each new contribution.
Jeff, I’ve loaded up on VGT and SHCD already, just curious, what do you think about high yield income ETFs like Yield MAX and QDTE?
I'm not a huge fan of high yield income ETFs in general. I think the underlying index (pre-call options) will grow more 99.9% of the time for an investor that is DCA in over time.
However, for a retiree that needs cash-flow, high yielding options will be necessary. In that case, I put a high importance on expense ratios (that money goes poof forever, the the opportunity cost compounds in a negative way) and quality indexes.
JEPQ is my favorite for it's 35 basis points ER, which is low for a high yielding ETF, and the Nasdaq-100 is great for options (more volatile than something like JEPI, and therefore more income in your pockets).
Something like QDTE will cost 6 or 7 figures, long-term, on the compounding costs of the 95 basis point expense ratio alone. That is before considering lower ceilings from the derivatives. The net math always plays out with every investing option. Sometimes people get enamored with big yield numbers, but that 'cost' is baked into returns by default. I'm not saying high yield is always bad, but it's never free.
QQQM will beat JEPQ on total returns long-term. It is almost mathematically impossible for that not to be the case (assuming the market goes up in the next 10, 20, 30+ years). But if you need more income *now*, JEPQ may be *better* for you.
Just wondering what your thoughts thoughts are about Goldman Sachs saying there’s only gonna be 3% growth each year for the next decade, where should we put our money?
I'm not Jeff but following the mindset of "always buy" means we don't listen to the media noise. Stay the course and buy monthly/weekly until retirement. If your emotions guide you, you will lose or underperform. If we listen to advice pulling us off course, we will take longer to get to our destination.
If GS is right, then all your buys will be great because your buying low. If GS is wrong and you keep buying your target allocations, you will always be buying the dip.
Hey Jeff. I think Roy nailed it with his answer to this one. We've been hearing about low returns coming for over a decade now. Seriously, since after the recovery bull from from the financial crisis.
The last decade has been one of the better ones in a long time. I'm glad I kept buying.
Now, if it really does only gain 3% per year, or even becomes a lost decade, then buying all the time will make us even more wealthy when we zoom out and the average gets 'back to' 10% over a longer stretch of time.
Of course, if retired, these spikes may need to be addressed because the accumulation stage is over. But if we set target allocations that make sense for age, goals, and timelines, then it is virtually impossible to lose with target allocations (assuming quality holdings in general for each category).
Hey Roy. This nails it.
Despite the news reports, GS said between minus 1 and 7 percent, but everyone ruining with the average. So if GS high end is right, 7% isn't too far from the historical average. In other words, nothing to see here and keep on buying.
The headlines cherry picked one thing from the GS report. If you read the actual report or a more detailed summary of it, GS said they expect the cap-weighted 500 to be 3.5% over the next decade. But they also said they expect the equal weighted 500 to outperform that by up to 8%. GS isn’t forecasting a bad decade, they just think the 500 will adjust back to a more normal distribution of cap weight after the recent explosion of the magnificent 7. If you believe their thesis then an equal weighted ETF such as RSP is a good bet to have in your portfolio alongside the usual VOO or SPY.
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Thank you for watching!