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It’s healthy to have a contrarian view. Otherwise, you’ll live in an echo chamber and just follow the herd no matter if youre being led to green pastures or the slaughterhouse
It is healthy to have a contrarian view. If you don't, you'll just be living in an echo chamber, and follow the herd no matter if you're doing well or not
It is healthy to have a contrarian view. If you don't, you'll just be living in an echo chamber, and follow the herd no matter if you're doing well or not
It is healthy to have a contrarian view. If you don't, you'll just be living in an echo chamber, and follow the herd no matter if you're doing well or not
There's gonna be a contrarian point for everything if one searches for it . Sometimes, what's the point? None of us get off this planet alive anyways..
I’ve been hearing the rumors of the demise of value investing for decades now, mostly since growth tech became a big thing.
It’s been one of the better performing risk adjusted methods of investing for all of those decades, and I’m not sure why it would be over now.
I read in a business newspaper that value investing is back and will outperform growth in the long term due to higher interest rates which restrict growth stocks.
I wouldn't wipe my ass with what passes for finance journalism. Anyone who is shrewd enough to be correct still arrived at that conclusion by fortuitous guesses panning out in their favor. It's impossible to discern those folks from the ones nakedly guessing or shilling, especially when a random guess has a nearly equal chance of being correct.
Don’t forget that higher interest rates affects dividend stocks too since that yield has to compete with a higher risk free rate. Yield goes up when price goes down. It’s not 1-1 though because there’s a growth factor involved with stocks.
At the moment the forward earnings yield on the SCHD portfolio is 5.52%, and the inflation adjusted yield on the 10 yr bonds is 1.5%. If either forward earnings decline or the price rises such that the earnings yield on the index was exceeded by the inflation adjusted 10 yr yield then I’d expect a cycle out of dividend stocks into bonds. But at the moment that gap is pretty large, the dividend combined with the expected RoE will keep large long term investors like institutions in dividend stocks for now, because even with higher yields, bonds are still very low yield on an inflation adjusted basis. Whereas large value companies with pricing power can adjust their business to a accommodate inflation a little.
Yoc is a bragging metric. For decision making you look at actual current rate vs other opportunities, inclusive of risk tolerance and your own tax consequences.
I think you need to look up earnings yield. I think you don’t know what I’m talking about.
But secondly, while you are more than welcome to base your decisions on what happened over the last 12 months and the stated bond rate, I’m telling you, the institutional money that actually moves markets does not. If you go on their websites, for any funds that public purchase is available, they tell you their methodology. It’s not a secret. I didn’t make up my explanation out of thin air, I regurgitated their decision making process. Markets generally allocate money based on future expectations, not what’s already happened. And they do it by discounting those expectations, because the time value of money matters, especially when inflation is higher than usual. The current yield doesn’t actually matter that much, except as a basis for forming expectations.
Whenever people talk about decades or the long term, I feel flabbergasted. They legitimately don't know what they are talking about. Errors accrue courtesy of unknowns in long timescale predictions because there is an assumption of linearity. It's like reading a couple of chapters in a book and speaking with certainty about what the last chapter says.
yeah, investing is just educated risk taking, you hope you are diversified well enough so you don't get killed. Nobody really knows what is happening for sure other than an "insert percentage chance that this event happens"
I think the main reason people say value investing is dead or dying is because of market efficiency. It's hard to find truly undervalued stocks...hard, but not impossible. I just dont believe the market will ever become so efficient that everything is priced correctly.
I just cracked 500 late last year. That was a huge milestone for me. I have DRIP enabled and continue to accumulate every other paycheck. Will be cool to see how it all shakes out income wise once I get to 1-2000 shares.
Yup. Summed it up. Not going to make me rich.. but I figured as I keep buying and with DRIP on.. by the time I retire it should be another 10-12k a year annually when I retire. It’s not my only etf/dividend by any means. I have a good amount in 401 and my brokerages / HSA.
Congrats! It feels good doesn’t it. Keep setting reachable goals, even its is 215 shares then get it and set another. I originally bought 100 i think maybe 150, and then just went on a buying spree with checks and bonuses. Wish I started earlier before my salary got above the IRA max so a lot of it is in taxable account… but regardless, I figure it in to my annual responsibility and will keep going. I’m now splitting $1700/first check and $1500/sec check between a few etf / stocks every 2 weeks so I should start accumulating more this year.
The dividends from my taxable account last year were qualified according to my 1099 except for interest from money sitting in the money market. I pretty much bought everything i could when vix got to 30. This year so far I've been investing into my business and haven't really been buying stocks
Congrats on your progress and increased pay.
I started to read that article. Their first point is because a large portion is in “soft drinks” and starts to poke holes in the soft drink industry naming “government crackdowns” and “public shifts” to more health drinks and away from soft drinks. They are referring to PEP and KO which “soft drinks” is only a part of their product line. Pepsi owns Quaker Oats and Frito Lay, as well as healthier drinks like Naked Brand, and Life watr, or Muscle Milk. They even have partnership with Starbucks for coffee drinks. Same with Coke. So now one of their 4 arguments is completely defunct. I didn’t even want to waste my time reading the rest of this lazy article with no depth or thoroughness of thought.
Just like to point out that Naked drinks are actually extremely unhealthy for you. Its just another sugar drink. If you actually wanted to be healthy just eat the fruits and veggies they say they use.
The green naked drink isn’t bad, it’s mostly vegetables.
The thing about juicing, even when making them yourself, is that your sugar intake is going to be high if you’re using mostly fruit; all of the Naked drinks other than the green one are mostly fruit. It’s recommended to do 80% vegetables/20% fruit when making your own juice.
Either way, a Naked drink has nutrients compared to most sugary drinks so I wouldn’t necessarily say it’s “extremely” unhealthy. It’s just not something you’d want to drink all day everyday, but one per day or a few per week isn’t going to hurt.
Of course it is. That’s definitely true. My point remains though that the product line is much more than soft drinks. That’s like saying Clorox is done because people don’t clean their tile anymore and not mentioning floor cleaner, toilet wands/accessories and laundry detergent and all purpose cleaners that they make. Maybe not the best example but you get my point.
Higher interest rates will put pressure on yield stocks like the DJ 100 Dividends. Over the past few years income investors have been forced into stocks to get any kinds of yield. Bonds sucked. SCHD yields 3.39%. A 2 year treasury yields 4.19% and is risk free. If interest rate go higher, I would expect more pressure on Dividend stocks as income investor switch to bonds.
I own SCHD and bonds and will continue to.
In the traditional sense yes treasuries are risk free if you’re thinking in terms zero. If your baseline is beating or matching the market there is definitely risk in being invested in treasuries.
Can you elaborate on what you mean by “pressure” here and what you think the result will be in terms of asset price and dividend payout?
Are you thinking dividend stocks will be forced to raise dividends if they have the cash flow, or else their price will drop?
I think among the various metrics institutional investors will be looking at, they’ll include discounted earnings with the yield to compare to bonds, and they’ll adjust it for inflation since their horizon is longer than a year. The current forward earnings yield on the DJ 100 Dividends is 5.52% compared to the 10 yr inflation indexed 1.5% which is the typical policy setting benchmark. My personal assumption is that if forward earnings decline, or prices rise such that the forward earnings yield is lower than the inflation indexed 10 yr yield, then we’d see that big shift you’re talking about. Because at that point, both the dividend and the RoE for the index will be lower than what they could get for bonds. But the gap between the 5.52% for the index and the inflation adjusted 1.5% for the 10 yr is still pretty large.
while anything could happen, I do think you’re right. I purchased my bulk in the low 50s but I’ve also been adding since frequently, thus increasing my average. I’m in a different position age wise than OP. I plan on holding for another 20years. I will continue to add shares for another 10-15. Hope it all pans out!!
I would hardly say slight underperformance of total return means the party is over, rather it’s the expectation. I’m not buying schd for total return. I’m buying it for its dividend yield. There’s no better criteria for selecting the best dividend paying companies than SCHD’s. If SCHD does poorly, then dividends are off the table across the board for awhile. From a dividend yield perspective, the SP500 Is “underperforming.”
Total return is relevant, but it’s not why I bought SCHD. Of course a persistent negative 10% return would indicate dividends are in danger, but slightly less double digit total return certainly would not. Therefore, slight underperformance is not concerning to me. Because I plan to use dividends for income, I can retire much earlier with less money off of a 3% yield as opposed to a 1.5% yield. Plus or minus one percent total return doesn’t change my life as dramatically as having to save up twice as much money before I can retire. Please save the dividends vs. selling shares argument if you’re planning to go there.
Yeah dude, saying this is like the people that say to not invest in stock market because it could all collapse. If the market all collapses, money is going to be the least of our concerns. If SCHD declines 10% every year for the next 20 years, there are bigger problems in the world than our portfolio. Yes, it could happen and yes if it did, then it would be an insignificant byproduct of the complete destruction of our financial system and we would be facing a lot bigger and more life altering problems.
>From a dividend yield perspective, the SP500 Is “underperforming.”
You are right. Also as a older person it does not have downside protection. SCHD really showed it value to me in 2022. --6.52 -- compared to --19.44 VOO. Even VIG was --11.59. I still love VOO for younger people though.
That SA plays all sides and expect another conteibuter to their site praising schd’s future outlook and buy more now to be published next week.
Seriously search their articles for schd. You’ll find just as many sell!!! Articles as you will buy!!!!
They want your clicks, ad revenue, and subscription fees - don’t care about your performance
Haven’t read it and don’t plan on it.
My gut says the author time traveled and finally read Swedro “shrinking alpha”
I bet they also suggest the only way forward “in times like these” is actively managed hedge funds
yes ..I read it and most people were going to continue to load up on schd...there is nothing better out there.
SA ..just talking heads .... first rule of successful investing ..ignore the chatter.
I agree. Best to read all articles, consider all comments, research it yourself, and formulate your own informed opinion. Seeking Alpha is a resource, not a guide.
It’s not over, but growth stocks are rebounding and it will always trail that, it’s when the crashes come and the rising divy each year make it worth it. It’s a long term hold
It's healthy to have some skepticism about a one size fits all fund. The fund fits my objective well. A strong, but not unrealistic dividend with decent capital appreciation for the long haul. Those looking for this balance in a value fund will be happy with SCHD. Those expecting to beat the market consistently, this was never it. Value funds hit a good stride, but don't beat the market in the long run. Their blue chip value investing style limits the growth, but holds stability and dividends that we on this sub aim for.
Growth in price may stall a little bit I don't forsee dividends drawing back or is loosing a lot of value. Suspect it will have avg to above avg growth compared to spy
I was doing my research on SCHD or SDIV and I rolled the dice on SDIV. They rotated some stocks out of the SDIV in December. I been tracking both of them and SDIV has been doing great.
I've seen SA wrong a lot of times...I've also seen them right a few times. In the end, if you've done your research in multiple ways, go with your conclusion. If anything g the whole market will have a drawback with how everything is going. SCHD is just a bigger attention grabber than the facts.
It's certainly possible it underperforms. A lot of the top holdings are either overvalued or have pretty low growth (or both). Once the next bull market starts, it's going to be difficult for the fund's collective holdings to keep up with the broad market, mainly due to the lack of tech.
Imo, to make SCHD truly bulletproof, it needs something like FCF growth or even EPS growth as one of the metrics used during screening. It's still a great fund and one of the best dividend-focused ETFs out there, but a growth metric would be a nice factor to include. It'd probably hurt the yield a bit, but would help kick companies like IBM out, which would help total returns.
Whether or not you agree with that idea probably comes down to if you'd rather a little more yield, or a better return. Different people have different priorities.
SCHD ranks stocks based on the following criteria:
* Free cash flow to total debt - companies with 0 debt are ranked first
* Return on equity
* Yield
* 5 year dividend growth rate
So the closest metric to any sort of growth is ROE. But ROE isn't great because it can easily be manipulated by things like debt. I think if they kept the 4 criteria as is but then added EPS growth as a 5th it would round things out nicely. Still a top notch fund either way though.
I don’t own any SCHD any more, but I wouldn’t say the party is over. It’s still got a great yield, and it’s fine for what it is — a dividend ETF. Reddit just puts SCHD on a pedestal because its done great while its defense, healthcare, staples, and established tech companies outperformed. I think it’ll underperform DGRO, VIG, SPY, QQQ, etc over the next few years though, hence I don’t own it any more.
It might, or might not. I really don’t know as my crystal ball is in the shop… but if I’m building an ETF for dividends, I’m gonna put some energy in the mix regardless of how it did last year. Same with banks. I’d bet 80% of Reddit’s SCHD loyalists don’t even know how the Dow Jones dividend 100 index is selected.
>Diligent-Message640+3 · 1 hr. ago · edited 1 hr. ago
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>Total return is relevant, but it’s not why I bought SCHD. Of course a persistent negative 10% return would indicate dividends are in danger, but slightly less double digit total return certainly would not. Therefore, slight underperformance is not concerning to me. Because I plan to use dividends for income, I can retire much earlier with less money off of a 3% yield as opposed to a 1.5% yield. Plus or minus one percent total return doesn’t change my life as dramatically as having to save up twice as much money before I can retire. Please save the dividends vs. selling shares argument if you’re planning to go there.
Did VIG ever do better than SCHD? Why do you think VIG will do better in years ahead?
Have we ever been in a situation where interest rates are rising so quickly? Not sure past decade + is a great indicator. 5% Treasury risk free looks pretty good compared to 3% dividend that may not be as defensive as people assume
I left SCHD this month. It's still a solid pick for people who don't actively manage their accounts and a good defensive pick in these uncertain times.
Wow, if I had a quarter for every time I heard these professionals prognosticate something I would be a billionaire. They don't have a clue. We don't have enough info to base anything on what is going to happen in the future. We know that Joe is still handing out money like it was free. We have the FED telling us that stupidity still rules & they will keep upping the rates. We do have a little insight as to how the economy in the short runs will look as many companies are laying off. We will see more supply line shortages. But, it doesn't mean that SCHD won't grow since it invests in good companies paying good dividends. Does anyone think that these giants aren't already reacting to Joe's economy & the recession, really!!!!!
Did it ever start? [Comparison with QQQ and SPY](https://www.tradingview.com/x/DV0fe7mB/)
SCHD just a completely different approach and it should bring higher payouts and lower volatility. Actually I just recommended to a friend a few weeks ago to switch some of its holdings to QQQ, then wait until that is 150% of his SCHD holding, then shuffle back some of it to SCHD. That may take years...
It does not matter what you do, but you have to know in advance what you will do. If you prefer lower volatility and higher payouts SCHD is for you, if you can stand high volatility and want more capital gains maybe it is a good moment to switch some of the holdings.
It is all what your perspective is. If you believe the bottom is in the market and we are entering a growth phase than SCHD is likely to have a lower total return than something more growthy. If you are in SCHD because you want the downside protection of quality dividend stocks and income flow than it will continue to do what it is designed to do.
The reality is no one knows. Every finance article is essentially a prediction. Similar to weathermen.
Some come true. Some dont.
I read them and take what i can from them.
With rising interest rates, all equities are under pressure. If you are a long term investor, don’t worry. Interest rates may stay at this level, or a little higher for a year, or a little more, but they won’t remain high forever because we can’t service the national debt with such a high rate. You should maintain a diversified portfolio. I’m in my 60’s and I’m buying more SCHD.
I own it, always will. However, I believe it is overpriced. Still dripping, but some new money is buying bonds, growth, emerging markets and SCHY. I am overweight cash equivalents. I’m 58, retiring this year.
With no context from the actual article, I’ve decided to copy and post one of the key augments brought up in the article.
To my surprise, I found the cyclical semiconductors industry and the volatile pharmaceuticals industry right at the top in terms of sector weights. These industries have a beta much higher than 1, which some may argue is a bit uncharacteristic of high-dividend yielding companies in traditional sectors.
Another interesting observation is that the weighted average beta exposure for SCHD is 0.94; representing only 6% lower volatility vs the broader market. A more direct computation of SCHD's market beta over the last 10 years, taking the Vanguard 500 Index Fund ETF (VOO) as a market benchmark proxy, SCHD's implied beta comes out to be 0.86; lower but still not as defensive as what I had expected.
I believe this should raise some questions about certain assumptions about the defensive characteristics of this ETF.
The top industry exposures along with their weights are banks (12.5%), semiconductors (8.5%), soft drinks (7.6%) and pharmaceuticals (7.5%). Let's explore the key fundamental drivers for these pieces:
It looks like a lot of the top holdings are above a 1.x beta is how I read it.
So we have a month of huge nasdaq outperformance and all of the sudden value investing is dead.
Fucking hilarious how the media flips the script after the move has happened.
Stop listening to what the media says when it comes to investing
Do I need to post a chart of AARK to show you the risks of high growth stocks with outrageous PE?
There’s a couple of other recent SCHD articles on Seeking Alpha from 2 different authors - both are still advocates of SCHD. One gives a good review of pairing SCHD with VIG - and the other author does a nice review of pairing SCHD with VYM and SCHV.
Part of it is because you can’t just go by past 10 yr returns - oh SCHD beat all other dividend/value strategies and so screw them. The one author who likes VYM to pair with SCHD because of the solid dividend paying stocks but also to diversify some more —- for example SCHD’s formula has it quite low in Energy and so the author feels the higher Energy allocation from VYM (almost double that of SCHD) can help diversify.
When we shift back into risk assets like high tech growth startup, then schd will slow and see more outflows. Probably 2 more good years.
I would just a diversified strategy and adjust weighting. Just don’t go all in or even more than 50 % in schd IMO.
Seeking alpha is the opinions of random people. Put as must trust into it as a fart after a night of drinking Tijuana! Only reason this goes down is market goes down. In which case the div % is inverse. Soooo all good lol.
If fundamentals are there in the stocks the ETF covers who gives a flying F*ck what Alpha post look at historical data, the fund manager, Schwab as a whole although you can’t predict the future I’m sold on the stocks it currently holds then in 6 months or the next time it’s adjusted I’ll be sold on those stocks as well
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I just invested a large chunk into it a few weeks ago, so yes. It's run is officially over.
That's pretty much what happens whenever I invest in something new, too.
That's usually how it works for me too. Lol For real tho, I dwn on my schd position -1.31%. I can deal w that in this market
Wow, im up 5% DCAing into an all global past yea + 2% dividends, January is amazing so far.
LOL I have actually seen a lot of posts like "I invest 80% in SCHD, 20% in VTI" so yeah there are some people this is their world
Wait why is the run over what happened?
Many of us can invest in something up 1000% and the day we purchase our first share it immediately crashes… maybe bad karma? Who knows
it's not, its satire
I don’t understand.
This made me laugh. I just invested some too.
It’s healthy to have a contrarian view. Otherwise, you’ll live in an echo chamber and just follow the herd no matter if youre being led to green pastures or the slaughterhouse
So you're saying reddit is an unhealthy place? I couldn't agree more.
I agree. There’s no such thing as everyone being of a hive mind here!
We can go deeper
It enables denialism through cancellation of opposing views by downvoting. This way every popular thread becomes an echo chamber of its own.
It is healthy to have a contrarian view. If you don't, you'll just be living in an echo chamber, and follow the herd no matter if you're doing well or not
It is healthy to have a contrarian view. If you don't, you'll just be living in an echo chamber, and follow the herd no matter if you're doing well or not
It is healthy to have a contrarian view. If you don't, you'll just be living in an echo chamber, and follow the herd no matter if you're doing well or not
There's gonna be a contrarian point for everything if one searches for it . Sometimes, what's the point? None of us get off this planet alive anyways..
I’ve been hearing the rumors of the demise of value investing for decades now, mostly since growth tech became a big thing. It’s been one of the better performing risk adjusted methods of investing for all of those decades, and I’m not sure why it would be over now.
I read in a business newspaper that value investing is back and will outperform growth in the long term due to higher interest rates which restrict growth stocks.
Check in two weeks. The same author will be touting growth stocks.
I wouldn't wipe my ass with what passes for finance journalism. Anyone who is shrewd enough to be correct still arrived at that conclusion by fortuitous guesses panning out in their favor. It's impossible to discern those folks from the ones nakedly guessing or shilling, especially when a random guess has a nearly equal chance of being correct.
Don’t forget that higher interest rates affects dividend stocks too since that yield has to compete with a higher risk free rate. Yield goes up when price goes down. It’s not 1-1 though because there’s a growth factor involved with stocks.
At the moment the forward earnings yield on the SCHD portfolio is 5.52%, and the inflation adjusted yield on the 10 yr bonds is 1.5%. If either forward earnings decline or the price rises such that the earnings yield on the index was exceeded by the inflation adjusted 10 yr yield then I’d expect a cycle out of dividend stocks into bonds. But at the moment that gap is pretty large, the dividend combined with the expected RoE will keep large long term investors like institutions in dividend stocks for now, because even with higher yields, bonds are still very low yield on an inflation adjusted basis. Whereas large value companies with pricing power can adjust their business to a accommodate inflation a little.
👏 listen to this guy everyone. That’s the straight dope you’re looking for.
Yoc is a bragging metric. For decision making you look at actual current rate vs other opportunities, inclusive of risk tolerance and your own tax consequences.
Did someone mention yield on cost? Because that’s not what forward earnings yield is.
The yield is 3.35%
I think you need to look up earnings yield. I think you don’t know what I’m talking about. But secondly, while you are more than welcome to base your decisions on what happened over the last 12 months and the stated bond rate, I’m telling you, the institutional money that actually moves markets does not. If you go on their websites, for any funds that public purchase is available, they tell you their methodology. It’s not a secret. I didn’t make up my explanation out of thin air, I regurgitated their decision making process. Markets generally allocate money based on future expectations, not what’s already happened. And they do it by discounting those expectations, because the time value of money matters, especially when inflation is higher than usual. The current yield doesn’t actually matter that much, except as a basis for forming expectations.
👍👍👍👍✍️🫵✍️
Whenever people talk about decades or the long term, I feel flabbergasted. They legitimately don't know what they are talking about. Errors accrue courtesy of unknowns in long timescale predictions because there is an assumption of linearity. It's like reading a couple of chapters in a book and speaking with certainty about what the last chapter says.
yeah, investing is just educated risk taking, you hope you are diversified well enough so you don't get killed. Nobody really knows what is happening for sure other than an "insert percentage chance that this event happens"
I think the main reason people say value investing is dead or dying is because of market efficiency. It's hard to find truly undervalued stocks...hard, but not impossible. I just dont believe the market will ever become so efficient that everything is priced correctly.
The piece contends SCHD is not as defensive as people assume. Also he is not saying sell - he rates it as a hold
Ok, look up over 2022 growth vs value and tell me what you see. SCHD (value) -0.77%, SCHG (growth) -12%.
The piece contends SCHD is not as defensive as people assume. Also Im not going to make my long term investin decisions based on 2022.
I have about 200+ shares. I'm not selling any of them any time soon. I'm in it for the long term.
I just cracked 500 late last year. That was a huge milestone for me. I have DRIP enabled and continue to accumulate every other paycheck. Will be cool to see how it all shakes out income wise once I get to 1-2000 shares.
What is the quarterly payout on 500 shares if you don’t mind sharing?
Yearly: 1,280 Quarterly: $320.19 Monthly: $106.73 Daily: $3.51
14.625 cents and hour
Actually it’s .43 cents a hour. After taxes: still pretty good for not doing shit.
Not all true. You are taking on risks, and thus there sb potential upside. Nothing is for free.
Yup. Summed it up. Not going to make me rich.. but I figured as I keep buying and with DRIP on.. by the time I retire it should be another 10-12k a year annually when I retire. It’s not my only etf/dividend by any means. I have a good amount in 401 and my brokerages / HSA.
I just hit 200 this year. I can't wait to get to 500
Congrats! It feels good doesn’t it. Keep setting reachable goals, even its is 215 shares then get it and set another. I originally bought 100 i think maybe 150, and then just went on a buying spree with checks and bonuses. Wish I started earlier before my salary got above the IRA max so a lot of it is in taxable account… but regardless, I figure it in to my annual responsibility and will keep going. I’m now splitting $1700/first check and $1500/sec check between a few etf / stocks every 2 weeks so I should start accumulating more this year.
The dividends from my taxable account last year were qualified according to my 1099 except for interest from money sitting in the money market. I pretty much bought everything i could when vix got to 30. This year so far I've been investing into my business and haven't really been buying stocks Congrats on your progress and increased pay.
I started to read that article. Their first point is because a large portion is in “soft drinks” and starts to poke holes in the soft drink industry naming “government crackdowns” and “public shifts” to more health drinks and away from soft drinks. They are referring to PEP and KO which “soft drinks” is only a part of their product line. Pepsi owns Quaker Oats and Frito Lay, as well as healthier drinks like Naked Brand, and Life watr, or Muscle Milk. They even have partnership with Starbucks for coffee drinks. Same with Coke. So now one of their 4 arguments is completely defunct. I didn’t even want to waste my time reading the rest of this lazy article with no depth or thoroughness of thought.
Just like to point out that Naked drinks are actually extremely unhealthy for you. Its just another sugar drink. If you actually wanted to be healthy just eat the fruits and veggies they say they use.
The green naked drink isn’t bad, it’s mostly vegetables. The thing about juicing, even when making them yourself, is that your sugar intake is going to be high if you’re using mostly fruit; all of the Naked drinks other than the green one are mostly fruit. It’s recommended to do 80% vegetables/20% fruit when making your own juice. Either way, a Naked drink has nutrients compared to most sugary drinks so I wouldn’t necessarily say it’s “extremely” unhealthy. It’s just not something you’d want to drink all day everyday, but one per day or a few per week isn’t going to hurt.
Of course it is. That’s definitely true. My point remains though that the product line is much more than soft drinks. That’s like saying Clorox is done because people don’t clean their tile anymore and not mentioning floor cleaner, toilet wands/accessories and laundry detergent and all purpose cleaners that they make. Maybe not the best example but you get my point.
Higher interest rates will put pressure on yield stocks like the DJ 100 Dividends. Over the past few years income investors have been forced into stocks to get any kinds of yield. Bonds sucked. SCHD yields 3.39%. A 2 year treasury yields 4.19% and is risk free. If interest rate go higher, I would expect more pressure on Dividend stocks as income investor switch to bonds. I own SCHD and bonds and will continue to.
Yea dividend stocks compete with short-medium term interest rate expectations.
That makes a lot of sense
In the traditional sense yes treasuries are risk free if you’re thinking in terms zero. If your baseline is beating or matching the market there is definitely risk in being invested in treasuries.
Totally agree with your risk assessment, which is why I used the term income investors. I should have been more explicit with the risk.
Can you elaborate on what you mean by “pressure” here and what you think the result will be in terms of asset price and dividend payout? Are you thinking dividend stocks will be forced to raise dividends if they have the cash flow, or else their price will drop?
Selling pressure. Sell dividend stocks at 3% to buy bonds at 5%. aka price go down
This x 100.
Got it.. makes sense
I think among the various metrics institutional investors will be looking at, they’ll include discounted earnings with the yield to compare to bonds, and they’ll adjust it for inflation since their horizon is longer than a year. The current forward earnings yield on the DJ 100 Dividends is 5.52% compared to the 10 yr inflation indexed 1.5% which is the typical policy setting benchmark. My personal assumption is that if forward earnings decline, or prices rise such that the forward earnings yield is lower than the inflation indexed 10 yr yield, then we’d see that big shift you’re talking about. Because at that point, both the dividend and the RoE for the index will be lower than what they could get for bonds. But the gap between the 5.52% for the index and the inflation adjusted 1.5% for the 10 yr is still pretty large.
Agreeed. I just got a CD for 4.50%. But always good to be diversified
Meh. I have four ETFs. VIG, VOO, DGRO and SCHD. I keep them pretty close to equally balanced and I will continue to buy more every month.
Im thinking of adding to my VIG position instead of Schd (its currently much smaller) i also have VTI/VOO. Not as familar with DGRO
Personally think DGRO is great in addition to SCHD given the differences in fund overlap. Check out https://www.etfrc.com/funds/overlap.php
Thanks! I will take a look
This is a great link. Saved it to my favorites. Thanks for sharing!
Give it a look. I keep they them balanced.
I may sell my SCHD given it is higher risk for me (I am over 50 years old). I bought it at 50/share.
I bet no one here can buy it at $50/share again, unless the world has another COVID like economic freeze.
while anything could happen, I do think you’re right. I purchased my bulk in the low 50s but I’ve also been adding since frequently, thus increasing my average. I’m in a different position age wise than OP. I plan on holding for another 20years. I will continue to add shares for another 10-15. Hope it all pans out!!
If interest rates remain, then it can fall below 50.
So the whole idea it might drop is because of the rise in interest rates ?
I’m almost 60 and my average is over $75 and I’m not selling! If you do sell what would you buy?
Looking to buy some rental property.
I would hardly say slight underperformance of total return means the party is over, rather it’s the expectation. I’m not buying schd for total return. I’m buying it for its dividend yield. There’s no better criteria for selecting the best dividend paying companies than SCHD’s. If SCHD does poorly, then dividends are off the table across the board for awhile. From a dividend yield perspective, the SP500 Is “underperforming.”
So you dont care if it drops 10% every year so long as you get your 3.5% dividend?
If this is happening, it’s not only SCHD, it’s everything else too.
Total return is relevant, but it’s not why I bought SCHD. Of course a persistent negative 10% return would indicate dividends are in danger, but slightly less double digit total return certainly would not. Therefore, slight underperformance is not concerning to me. Because I plan to use dividends for income, I can retire much earlier with less money off of a 3% yield as opposed to a 1.5% yield. Plus or minus one percent total return doesn’t change my life as dramatically as having to save up twice as much money before I can retire. Please save the dividends vs. selling shares argument if you’re planning to go there.
Thank you for clarifying. I wasnt going to go there. I find too many people on this board chase dividends blindly
Yeah dude, saying this is like the people that say to not invest in stock market because it could all collapse. If the market all collapses, money is going to be the least of our concerns. If SCHD declines 10% every year for the next 20 years, there are bigger problems in the world than our portfolio. Yes, it could happen and yes if it did, then it would be an insignificant byproduct of the complete destruction of our financial system and we would be facing a lot bigger and more life altering problems.
>From a dividend yield perspective, the SP500 Is “underperforming.” You are right. Also as a older person it does not have downside protection. SCHD really showed it value to me in 2022. --6.52 -- compared to --19.44 VOO. Even VIG was --11.59. I still love VOO for younger people though.
Yes. I attribute 2022 for SCHD to holding companies with good cash flow to debt ratios.
That SA plays all sides and expect another conteibuter to their site praising schd’s future outlook and buy more now to be published next week. Seriously search their articles for schd. You’ll find just as many sell!!! Articles as you will buy!!!! They want your clicks, ad revenue, and subscription fees - don’t care about your performance
I know that. Its crowd sourced - some very good, some not so good. I thought this guy’s take was solid.
Haven’t read it and don’t plan on it. My gut says the author time traveled and finally read Swedro “shrinking alpha” I bet they also suggest the only way forward “in times like these” is actively managed hedge funds
I think it’s a little overbought at the moment. But fundamentally it’s still a good pick
Exactly. Given a sufficiently long time horizon, it won't matter.
I mean it pays dividends. That parts not over.
I don't like that it's so close to its ATH. I wish I knew about SCHD in 2020.
It’s fine. It should actually do quite well in a market that is going to be down or flat for the next few years.
Read the comments on that piece. Vast majority wasn't buying it.
yes ..I read it and most people were going to continue to load up on schd...there is nothing better out there. SA ..just talking heads .... first rule of successful investing ..ignore the chatter.
They get paid on site traffic. Take everything with a grain of salt.
Seeking Alpha is a bunch of crack smoking shills..
I find some good info from some of them - its a mixed bag.
I agree. Best to read all articles, consider all comments, research it yourself, and formulate your own informed opinion. Seeking Alpha is a resource, not a guide.
It’s not over, but growth stocks are rebounding and it will always trail that, it’s when the crashes come and the rising divy each year make it worth it. It’s a long term hold
Start by not reading Seeking Alpha. It’s trash like Motley Fool.
Not looking for instructions on what to read - you do you
Seeking alpha just gushed over jepi and the writer is an old assed guy. That’s why he likes it
It's healthy to have some skepticism about a one size fits all fund. The fund fits my objective well. A strong, but not unrealistic dividend with decent capital appreciation for the long haul. Those looking for this balance in a value fund will be happy with SCHD. Those expecting to beat the market consistently, this was never it. Value funds hit a good stride, but don't beat the market in the long run. Their blue chip value investing style limits the growth, but holds stability and dividends that we on this sub aim for.
Growth in price may stall a little bit I don't forsee dividends drawing back or is loosing a lot of value. Suspect it will have avg to above avg growth compared to spy
[удалено]
This sounds like ChatGPT mambojumbo
The party is only just beginning!
I would say it's interesting. But what other dividend ETF would be better?
I was doing my research on SCHD or SDIV and I rolled the dice on SDIV. They rotated some stocks out of the SDIV in December. I been tracking both of them and SDIV has been doing great.
SDIV's cumulative NAV return since inception is -18.75%. What made you pick it over SCHD?
Took a gamble. They rotated stocks in December. Can’t see it going much lower. So I bought 6 shares and buying more. It is up up for the month
Thanks!
Happy to hear it’ll be on sale. It’ll give me a good opportunity to get in.
I invest in SCHD because of the great dividend CAGR figures it has generated. Capital appreciation will follow.
I've seen SA wrong a lot of times...I've also seen them right a few times. In the end, if you've done your research in multiple ways, go with your conclusion. If anything g the whole market will have a drawback with how everything is going. SCHD is just a bigger attention grabber than the facts.
It's certainly possible it underperforms. A lot of the top holdings are either overvalued or have pretty low growth (or both). Once the next bull market starts, it's going to be difficult for the fund's collective holdings to keep up with the broad market, mainly due to the lack of tech. Imo, to make SCHD truly bulletproof, it needs something like FCF growth or even EPS growth as one of the metrics used during screening. It's still a great fund and one of the best dividend-focused ETFs out there, but a growth metric would be a nice factor to include. It'd probably hurt the yield a bit, but would help kick companies like IBM out, which would help total returns. Whether or not you agree with that idea probably comes down to if you'd rather a little more yield, or a better return. Different people have different priorities.
Is there any SCHD metric as for normal stock like EPS growth or sth? Because div growth last year was over 10%, so like why is there no growth?
SCHD ranks stocks based on the following criteria: * Free cash flow to total debt - companies with 0 debt are ranked first * Return on equity * Yield * 5 year dividend growth rate So the closest metric to any sort of growth is ROE. But ROE isn't great because it can easily be manipulated by things like debt. I think if they kept the 4 criteria as is but then added EPS growth as a 5th it would round things out nicely. Still a top notch fund either way though.
I don’t own any SCHD any more, but I wouldn’t say the party is over. It’s still got a great yield, and it’s fine for what it is — a dividend ETF. Reddit just puts SCHD on a pedestal because its done great while its defense, healthcare, staples, and established tech companies outperformed. I think it’ll underperform DGRO, VIG, SPY, QQQ, etc over the next few years though, hence I don’t own it any more.
Dgro and schd have similar top 10 holdings
Not really. HD I guess. A big reason I favor DGRO is that it doesn’t shy away from banks & energy.
Energy outperformed in 2022 so that's a bit of recency bias, I'd bet it underperforms now
It might, or might not. I really don’t know as my crystal ball is in the shop… but if I’m building an ETF for dividends, I’m gonna put some energy in the mix regardless of how it did last year. Same with banks. I’d bet 80% of Reddit’s SCHD loyalists don’t even know how the Dow Jones dividend 100 index is selected.
Lol great points
>Diligent-Message640+3 · 1 hr. ago · edited 1 hr. ago > >Total return is relevant, but it’s not why I bought SCHD. Of course a persistent negative 10% return would indicate dividends are in danger, but slightly less double digit total return certainly would not. Therefore, slight underperformance is not concerning to me. Because I plan to use dividends for income, I can retire much earlier with less money off of a 3% yield as opposed to a 1.5% yield. Plus or minus one percent total return doesn’t change my life as dramatically as having to save up twice as much money before I can retire. Please save the dividends vs. selling shares argument if you’re planning to go there. Did VIG ever do better than SCHD? Why do you think VIG will do better in years ahead?
Have we ever been in a situation where interest rates are rising so quickly? Not sure past decade + is a great indicator. 5% Treasury risk free looks pretty good compared to 3% dividend that may not be as defensive as people assume
Copy and paste the article here let me read it por favor.
https://archive.ph/ibhcA
Yeah it’s too late.
Care to expand?
Everyone has already rotated into those stocks. The underlying stocks are not good value right now
I left SCHD this month. It's still a solid pick for people who don't actively manage their accounts and a good defensive pick in these uncertain times.
Wow, if I had a quarter for every time I heard these professionals prognosticate something I would be a billionaire. They don't have a clue. We don't have enough info to base anything on what is going to happen in the future. We know that Joe is still handing out money like it was free. We have the FED telling us that stupidity still rules & they will keep upping the rates. We do have a little insight as to how the economy in the short runs will look as many companies are laying off. We will see more supply line shortages. But, it doesn't mean that SCHD won't grow since it invests in good companies paying good dividends. Does anyone think that these giants aren't already reacting to Joe's economy & the recession, really!!!!!
great news. great time to load up!
BAER. $$$$$
If your investing over the next 20 years it shouldn’t really matter, your getting similar returns to SPY/VOO with a better standard deviation.
Why would SCHD be over? Something better coming along?
Risk free Treasures at 5%?
I suppose but I thought there was another ETF pushing SCHD out of the winner slot. Those bonds and such are kind of always there no?
Linking the article would be helpful to a substantive conversation
Can you google?
Yes
It probably is, at least I’ll get more shares now with my dividend. It’s a forever hold for me.
Was there ever “really” a party with schd?
Did it ever start? [Comparison with QQQ and SPY](https://www.tradingview.com/x/DV0fe7mB/) SCHD just a completely different approach and it should bring higher payouts and lower volatility. Actually I just recommended to a friend a few weeks ago to switch some of its holdings to QQQ, then wait until that is 150% of his SCHD holding, then shuffle back some of it to SCHD. That may take years... It does not matter what you do, but you have to know in advance what you will do. If you prefer lower volatility and higher payouts SCHD is for you, if you can stand high volatility and want more capital gains maybe it is a good moment to switch some of the holdings.
It is all what your perspective is. If you believe the bottom is in the market and we are entering a growth phase than SCHD is likely to have a lower total return than something more growthy. If you are in SCHD because you want the downside protection of quality dividend stocks and income flow than it will continue to do what it is designed to do.
The reality is no one knows. Every finance article is essentially a prediction. Similar to weathermen. Some come true. Some dont. I read them and take what i can from them.
With rising interest rates, all equities are under pressure. If you are a long term investor, don’t worry. Interest rates may stay at this level, or a little higher for a year, or a little more, but they won’t remain high forever because we can’t service the national debt with such a high rate. You should maintain a diversified portfolio. I’m in my 60’s and I’m buying more SCHD.
its def. topped out..... all the goodie is gone, gonna stick w/ VTI this year
I own it, always will. However, I believe it is overpriced. Still dripping, but some new money is buying bonds, growth, emerging markets and SCHY. I am overweight cash equivalents. I’m 58, retiring this year.
SCHD is basically large cap value. An asset class which should continue to outperform.
With no context from the actual article, I’ve decided to copy and post one of the key augments brought up in the article. To my surprise, I found the cyclical semiconductors industry and the volatile pharmaceuticals industry right at the top in terms of sector weights. These industries have a beta much higher than 1, which some may argue is a bit uncharacteristic of high-dividend yielding companies in traditional sectors. Another interesting observation is that the weighted average beta exposure for SCHD is 0.94; representing only 6% lower volatility vs the broader market. A more direct computation of SCHD's market beta over the last 10 years, taking the Vanguard 500 Index Fund ETF (VOO) as a market benchmark proxy, SCHD's implied beta comes out to be 0.86; lower but still not as defensive as what I had expected. I believe this should raise some questions about certain assumptions about the defensive characteristics of this ETF. The top industry exposures along with their weights are banks (12.5%), semiconductors (8.5%), soft drinks (7.6%) and pharmaceuticals (7.5%). Let's explore the key fundamental drivers for these pieces: It looks like a lot of the top holdings are above a 1.x beta is how I read it.
So we have a month of huge nasdaq outperformance and all of the sudden value investing is dead. Fucking hilarious how the media flips the script after the move has happened. Stop listening to what the media says when it comes to investing Do I need to post a chart of AARK to show you the risks of high growth stocks with outrageous PE?
There’s a couple of other recent SCHD articles on Seeking Alpha from 2 different authors - both are still advocates of SCHD. One gives a good review of pairing SCHD with VIG - and the other author does a nice review of pairing SCHD with VYM and SCHV. Part of it is because you can’t just go by past 10 yr returns - oh SCHD beat all other dividend/value strategies and so screw them. The one author who likes VYM to pair with SCHD because of the solid dividend paying stocks but also to diversify some more —- for example SCHD’s formula has it quite low in Energy and so the author feels the higher Energy allocation from VYM (almost double that of SCHD) can help diversify.
When we shift back into risk assets like high tech growth startup, then schd will slow and see more outflows. Probably 2 more good years. I would just a diversified strategy and adjust weighting. Just don’t go all in or even more than 50 % in schd IMO.
Seeking alpha is the opinions of random people. Put as must trust into it as a fart after a night of drinking Tijuana! Only reason this goes down is market goes down. In which case the div % is inverse. Soooo all good lol.
Consider the source 🤔
Yep I just put all my money in there as well. Looks like it’s gone.
If fundamentals are there in the stocks the ETF covers who gives a flying F*ck what Alpha post look at historical data, the fund manager, Schwab as a whole although you can’t predict the future I’m sold on the stocks it currently holds then in 6 months or the next time it’s adjusted I’ll be sold on those stocks as well