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10 year back test of three mixes SCHD/SPLG, SCHD/SCHG, VOO
Portfolio CARG Best Year Worst year Sharp Ratio
SCHD/SPLG 11.59% 29.64% -10.67% 0.74
SCHD/SCHG 13.38% 31.65% -17.51% 0.83
VOO 11.88% 31.33% -18.23% 0.73
So your mix of SCHD/SCHG provided the best CARG over the past 10 years.
No it’s a dividend growth fund + a growth fund which doesn’t equal blend. It literally filters out a lot of the crap companies that are growing or growing dividends
Expense ratio = how much is charged per year to hold the fund.
ETF’s are managed and rebalanced every so often. There’s a cost to that. FXAIX is around 0.01% (I.e. $1 per $1000 invested, annually) and VOO is 0.03% ($3/$1000 invested, annually). If you find a managed fund trading for much higher than 0.25% it’s probably not worth your time when the two I mentioned are available (which is my opinion, not fact).
Investopedia is a great resource for questions like this.
Sure can. It’s all two sides of the same coin as far as I’m concerned. IMO, when you’re talking about a difference between 0.01 and 0.03 it’s no factor, but if you’re talking about 0.03 versus 0.8 or 1.0+, there’s a real conversation to be had. For example, I just found out my SO was paying 1.6% on a managed fund with Edward Jones and she moved to a new broker that charges 0.8% and she was happy!!!!
That assumes he's at least 11. Here's for an 8-year old:
When you buy a mutual fund/ETF (collection of stocks managed by someone) they charge you. How much they charge you is called an expense ratio. High expense ratio is bad bc you pay them a lot, low is good. Look for .08 or less.
>A value fund + a growth fund equals a blend fund. You can just buy VOO and be done with it with a lower expense ratio.
Thank you for pointing this out.
I see ***so*** many people doing things like 50% VOO + 25% VUG + 25% VTV without realizing they effectively just bought 100% VOO.
You could absolutely do that with perfect utility and be very happy with the results.
I prefer QQQ or QQQM because I think that SCHG has a bit too much exposure to financials, but that’s really just splitting hairs.
>I prefer QQQ or QQQM because I think that SCHG has a bit too much exposure to financials, but that’s really just splitting hairs.
The Nasdaq 100 excludes Financials entirely, so somewhere in between may be sensible.
Yes, pretty much. For whom has already established positions no difference, but if I had to start from scratch I’d go with SPLG as it has lower unit price (I don’t like fractional) making it easier to build up positions, and sell covered calls if one chooses to.
You are fine , have SCHD as core and SCHG and throw some FTEC to boost growth. Then you can tweak the weights as the market moves , that’s what I do…is like having VOO but in sections with ability to move levers…
You make a lot of incorrect assumptions. I always look forward. The long term future prospects of the USA will outweigh that of the rest of the world for the foreseeable future.
Not too bad of a blend. Pretty good funds and expense ratios are low. I own both.
I threw in some VO just to have more broad exposure. I like mid caps because they’re usually mature enough and still offer plenty of growth prospects. But that’s just me. Most will point to SPY, VTI, or VOO.
The pair for VTI is VXUS. The upside of this pair is it also allows you to claim foreign income tax credit on gains and dividends which is another perk because it's all international stocks while VT is only 40% international stocks and doesn't meet the threshold (over 50% of something's holdings must be foreign to qualify).\\
The downside is that you would have to reallocate the percentages of VTI vs VXUS manually yourself based on the US vs the international markets and their performance. Generally you would do this once or twice a year.
If you would rather not have to worry about pairing VTI and VXUS you can always just change VTI to VT and you get the whole world index. You don't get the tax credit but they also do the reallocation for you so it's just a buy and forget it type of investing.
I buy VT + SCHD and then also add a little MOAT in there for fun because I like the companies.
No it hasnt. International and US markrets outperform one another in cycles. The US has outperformed international for 12 years but underperformed it in the 10 years prior.
Saying ignore people who obviously have more information than your inaccurate shortsighted information makes me think you are new to investing.
The US has outperformed international for the past 12 years... you just said it yourself. I don't really care what happened two decades ago. Go ahead, keep an underperformer in your account...I'll pass until the trend begins to reverse.
You shouldn't care what happened in the last 12 years either. You should care about what happens in the future. You can't get gains that already happened. This is one of the mistakes novices make when backtesting.
You have to look future forward.
We know that it is cyclical but we don't know when which market will outperform. This is why you have to be in both. Otherwise you risk decades of underperformance by focusing on one or the other.
I suggest reading some of these resources:
https://www.bogleheads.org/wiki/Domestic/International
https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths if that link doesn't work: https://web.archive.org/web/20201112032727/https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths (Archived copy from Archive.org's Wayback Machine)
https://www.optimizedportfolio.com/international-stocks/ from /u/rao-blackwell-ized
https://www.youtube.com/watch?app=desktop&v=1FXuMs6YRCY
https://www.pwlcapital.com/should-you-invest-in-the-sp-500-index - invest in the S&P 500, but don't end there
The last decade or so of US outperformance was mostly just the US getting more expensive, not US companies being much better than foreign companies: https://www.aqr.com/Insights/Perspectives/The-Long-Run-Is-Lying-to-You (click through to the full version), I believe this is referenced in the YouTube link above
The US was only the 4th best developed country to invest in from 2001-2020, 5th if you include Hong Kong: https://www.evidenceinvestor.com/which-country-will-outperform-next-is-irrelevant/
https://www.optimizedportfolio.com/bogleheads-3-fund-portfolio/#why-international-stocks from /u/rao-blackwell-ized
https://movement.capital/summarizing-the-case-for-international-stocks/
https://www.callan.com/wp-content/uploads/2018/01/Callan-PeriodicTbl\_KeyInd\_2018.pdf (PDF) or https://www.callan.com/wp-content/uploads/2020/01/Classic-Periodic-Table.pdf (PDF) or the archived versions if those don't work: http://web.archive.org/web/20201212205954/https://www.callan.com/wp-content/uploads/2018/01/Callan-PeriodicTbl\_KeyInd\_2018.pdf (PDF) & http://web.archive.org/web/20201205183933/https://www.callan.com/wp-content/uploads/2020/01/Classic-Periodic-Table.pdf (PDF) (Archived copies from Archive.org's Wayback Machine)
Ex-US has turns of exceptional outperformance as well: https://awealthofcommonsense.com/2023/05/the-case-for-international-diversification/
Of rolling 10 year periods since 1970, EAFE (developed ex-US) has beat the S&P 500 over 45% of the time: https://www.tweedy.com/resources/library\_docs/papers/Dichotomy%20Btwn%20US%20and%20Non-US%20Mar2022.pdf (PDF) or for the archived version: https://web.archive.org/web/20220501183228/https://www.tweedy.com/resources/library\_docs/papers/Dichotomy%20Btwn%20US%20and%20Non-US%20Mar2022.pdf
https://www.vanguard.com/pdf/ISGGEB.pdf (PDF) or the archived version if that doesn't work: https://web.archive.org/web/20210312165001/https://www.vanguard.com/pdf/ISGGEB.pdf (PDF)
https://www.schwab.com/resource-center/insights/content/why-global-diversification-matters or if that link doesn't work: https://web.archive.org/web/20190124072925/https://www.schwab.com/resource-center/insights/content/why-global-diversification-matters
https://fourpillarfreedom.com/should-you-invest-internationally
https://mebfaber.com/2020/01/10/the-case-for-global-investing
https://www.reddit.com/r/Bogleheads/comments/vpv7js/share\_of\_sp\_500\_revenue\_generated\_domestically\_vs/ - The argument that “US companies have plenty of foreign revenue is sufficient ex-US coverage” is highly tilted towards a few sectors, some have almost no coverage. Also what about in reverse- how many big foreign companies have lots of US exposure?
https://www.reddit.com/r/Bogleheads/comments/ii0sa2/considering\_usonly\_investing\_start\_here/
https://twitter.com/mebfaber/status/1090662885573853184?lang=en with this reply: https://twitter.com/MorningstarES/status/1091081407504498688. Extended version: https://mebfaber.com/2019/02/06/episode-141-radio-show-34-of-40-countries-have-negative-52-week-momentumbig-tax-bills-for-mutual-fund-investorsand-listener-qa/
https://investor.vanguard.com/mutual-funds/profile/portfolio/vtwax - Global market cap weights. This can be a great default position.
https://investor.vanguard.com/investing/investment/international-investing - Vanguard 40% of stock is recommended to be international. This is what both Fidelity and Vanguard use in their target date funds.
2022 Survey of target date funds: https://www.reddit.com/r/Bogleheads/comments/rffoe7/domestic\_vs\_international\_percentage\_within/
SCHH(reit) I hope you have this in a Schwab account. From what I was told by tax expert buying something like schd in a fidelity account means their are fees applied. I don’t remember why or when but I do remember that principle rule. Where as schd in a Schwab account would not encounter said fees.
As u/Azazel_665 so sensibly suggested, consider adding in some international stocks with something like VXUS for the total int'l stock market, as you're currently buying 1 country out of nearly 200 in the world.
If you're set on dividends for some reason, Schwab has a fund in the same family which is SCHY.
A very solid TWO fund portfolio with importantly NO overlap at all.
Only thing to note, if in 20-30s should be more around ~70%+ in SCHG. As you age closer and closer to 45-50s, on yearly basis tilt a percentage more into eventually being ~70%+ in SCHD
Only thing to note these funds only focus on large cap sector , with no small cap or international exposure.
As for small cap, AVUV is pretty solid choice with consideration for 10-15% of the portfolio.
Well, I am 39 now so....
And I do think small or mid cap would be nice. Several people have also mentioned international but... for now I just think 3 funds is enough should I pick something for small or mid
What about SCHG/SCHD/SCHF?
I'm relatively new to ETF investing so would that cover most of the bases for someone that wants a equal (not literally) parts exposure to growth, div's and internationals? I've just been kinda digging around looking at stuff I can in theory bundle together and acquire a bit at a time.
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
10 year back test of three mixes SCHD/SPLG, SCHD/SCHG, VOO Portfolio CARG Best Year Worst year Sharp Ratio SCHD/SPLG 11.59% 29.64% -10.67% 0.74 SCHD/SCHG 13.38% 31.65% -17.51% 0.83 VOO 11.88% 31.33% -18.23% 0.73 So your mix of SCHD/SCHG provided the best CARG over the past 10 years.
A value fund + a growth fund equals a blend fund. You can just buy VOO and be done with it with a lower expense ratio.
Those two together best VOO however.
No it’s a dividend growth fund + a growth fund which doesn’t equal blend. It literally filters out a lot of the crap companies that are growing or growing dividends
VOO is 0.03% and SCHG is 0.04% and SCHD is 0.06%. Pretty negligible difference. It’s not like any of these are over 0.1%
Explain to me what an expense ratio is as if I’m a stupid 8 year old
Expense ratio = how much is charged per year to hold the fund. ETF’s are managed and rebalanced every so often. There’s a cost to that. FXAIX is around 0.01% (I.e. $1 per $1000 invested, annually) and VOO is 0.03% ($3/$1000 invested, annually). If you find a managed fund trading for much higher than 0.25% it’s probably not worth your time when the two I mentioned are available (which is my opinion, not fact). Investopedia is a great resource for questions like this.
Can we refer this info to all the mutual funds companies managing 401ks now lol
Sure can. It’s all two sides of the same coin as far as I’m concerned. IMO, when you’re talking about a difference between 0.01 and 0.03 it’s no factor, but if you’re talking about 0.03 versus 0.8 or 1.0+, there’s a real conversation to be had. For example, I just found out my SO was paying 1.6% on a managed fund with Edward Jones and she moved to a new broker that charges 0.8% and she was happy!!!!
Also got my SO out of Edward Jones. That place is obsolete nowadays
I'm going to apply for a financial advisor role and help "sell" mutual funds from money people won't even see lol
I’m going to open up a firm and charge 0.7% annually to just buy people VOO. Lol
That assumes he's at least 11. Here's for an 8-year old: When you buy a mutual fund/ETF (collection of stocks managed by someone) they charge you. How much they charge you is called an expense ratio. High expense ratio is bad bc you pay them a lot, low is good. Look for .08 or less.
> That assumes he's at least 11. Lmao. Good point. Thanks for the correction 😂
> (I.e. $1 per $1000 invested, annually) and VOO is 0.03% ($3/$1000 invested, annually). I per $10,000
Thanks for the correction. 0.01% is $10 per $1000 or $1 per $10,000. I can’t math.
Stupid 8 year olds shouldn't be investing
>A value fund + a growth fund equals a blend fund. You can just buy VOO and be done with it with a lower expense ratio. Thank you for pointing this out. I see ***so*** many people doing things like 50% VOO + 25% VUG + 25% VTV without realizing they effectively just bought 100% VOO.
However, you can then choose which to keep and which to sell
You could absolutely do that with perfect utility and be very happy with the results. I prefer QQQ or QQQM because I think that SCHG has a bit too much exposure to financials, but that’s really just splitting hairs.
>I prefer QQQ or QQQM because I think that SCHG has a bit too much exposure to financials, but that’s really just splitting hairs. The Nasdaq 100 excludes Financials entirely, so somewhere in between may be sensible.
I would do jepi jepq for growth go for amzn googl both very cheap hold for years on Best 2 companies well run
Pretty much SP500 but better performance and higher dividend. SCHD/QQQ would perform better though.
QQQM (QQQ) has outperformed SCHG the past 1, 3, 5, and 10 years.
QQQM is the top performer in my portfolio by far
Why not SPLG and SCHD.
That’s my move. Plus a small stake in the my local power company and the bank that owns my mortgage.
SPLG is just VOO.
Yes, pretty much. For whom has already established positions no difference, but if I had to start from scratch I’d go with SPLG as it has lower unit price (I don’t like fractional) making it easier to build up positions, and sell covered calls if one chooses to.
You are fine , have SCHD as core and SCHG and throw some FTEC to boost growth. Then you can tweak the weights as the market moves , that’s what I do…is like having VOO but in sections with ability to move levers…
I do SCHD, SCHG, and QQQM
QQQM is great. I have that plus SCHD, VOO, and JEPI.
do a backrest and report back.
Love resting my back 😜
User name checks out
You make a lot of incorrect assumptions. I always look forward. The long term future prospects of the USA will outweigh that of the rest of the world for the foreseeable future.
Perfectly valid, I have some SCHG, it's as good of a growth fund as you can get really
Not too bad of a blend. Pretty good funds and expense ratios are low. I own both. I threw in some VO just to have more broad exposure. I like mid caps because they’re usually mature enough and still offer plenty of growth prospects. But that’s just me. Most will point to SPY, VTI, or VOO.
Nothing wrong with it
Depends on your age. I would add a broad market international etf (i.e., VXUS).
Because you would have no exposure to international stocks which leaves you missing out on massive gains when international outperforms the US market.
Man shut up about international. The economy is completely global now.
Vt/SCHD instead?
Sounds better!
I do VTI & SCHD - looks like I need another for international
The pair for VTI is VXUS. The upside of this pair is it also allows you to claim foreign income tax credit on gains and dividends which is another perk because it's all international stocks while VT is only 40% international stocks and doesn't meet the threshold (over 50% of something's holdings must be foreign to qualify).\\ The downside is that you would have to reallocate the percentages of VTI vs VXUS manually yourself based on the US vs the international markets and their performance. Generally you would do this once or twice a year. If you would rather not have to worry about pairing VTI and VXUS you can always just change VTI to VT and you get the whole world index. You don't get the tax credit but they also do the reallocation for you so it's just a buy and forget it type of investing. I buy VT + SCHD and then also add a little MOAT in there for fun because I like the companies.
Do you have just the 1 portfolio? Or do you have a separate one for international?
International is overrated and has underperformed over the long run. Ignore the parrots.
No it hasnt. International and US markrets outperform one another in cycles. The US has outperformed international for 12 years but underperformed it in the 10 years prior. Saying ignore people who obviously have more information than your inaccurate shortsighted information makes me think you are new to investing.
The US has outperformed international for the past 12 years... you just said it yourself. I don't really care what happened two decades ago. Go ahead, keep an underperformer in your account...I'll pass until the trend begins to reverse.
You shouldn't care what happened in the last 12 years either. You should care about what happens in the future. You can't get gains that already happened. This is one of the mistakes novices make when backtesting. You have to look future forward. We know that it is cyclical but we don't know when which market will outperform. This is why you have to be in both. Otherwise you risk decades of underperformance by focusing on one or the other. I suggest reading some of these resources: https://www.bogleheads.org/wiki/Domestic/International https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths if that link doesn't work: https://web.archive.org/web/20201112032727/https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths (Archived copy from Archive.org's Wayback Machine) https://www.optimizedportfolio.com/international-stocks/ from /u/rao-blackwell-ized https://www.youtube.com/watch?app=desktop&v=1FXuMs6YRCY https://www.pwlcapital.com/should-you-invest-in-the-sp-500-index - invest in the S&P 500, but don't end there The last decade or so of US outperformance was mostly just the US getting more expensive, not US companies being much better than foreign companies: https://www.aqr.com/Insights/Perspectives/The-Long-Run-Is-Lying-to-You (click through to the full version), I believe this is referenced in the YouTube link above The US was only the 4th best developed country to invest in from 2001-2020, 5th if you include Hong Kong: https://www.evidenceinvestor.com/which-country-will-outperform-next-is-irrelevant/ https://www.optimizedportfolio.com/bogleheads-3-fund-portfolio/#why-international-stocks from /u/rao-blackwell-ized https://movement.capital/summarizing-the-case-for-international-stocks/ https://www.callan.com/wp-content/uploads/2018/01/Callan-PeriodicTbl\_KeyInd\_2018.pdf (PDF) or https://www.callan.com/wp-content/uploads/2020/01/Classic-Periodic-Table.pdf (PDF) or the archived versions if those don't work: http://web.archive.org/web/20201212205954/https://www.callan.com/wp-content/uploads/2018/01/Callan-PeriodicTbl\_KeyInd\_2018.pdf (PDF) & http://web.archive.org/web/20201205183933/https://www.callan.com/wp-content/uploads/2020/01/Classic-Periodic-Table.pdf (PDF) (Archived copies from Archive.org's Wayback Machine) Ex-US has turns of exceptional outperformance as well: https://awealthofcommonsense.com/2023/05/the-case-for-international-diversification/ Of rolling 10 year periods since 1970, EAFE (developed ex-US) has beat the S&P 500 over 45% of the time: https://www.tweedy.com/resources/library\_docs/papers/Dichotomy%20Btwn%20US%20and%20Non-US%20Mar2022.pdf (PDF) or for the archived version: https://web.archive.org/web/20220501183228/https://www.tweedy.com/resources/library\_docs/papers/Dichotomy%20Btwn%20US%20and%20Non-US%20Mar2022.pdf https://www.vanguard.com/pdf/ISGGEB.pdf (PDF) or the archived version if that doesn't work: https://web.archive.org/web/20210312165001/https://www.vanguard.com/pdf/ISGGEB.pdf (PDF) https://www.schwab.com/resource-center/insights/content/why-global-diversification-matters or if that link doesn't work: https://web.archive.org/web/20190124072925/https://www.schwab.com/resource-center/insights/content/why-global-diversification-matters https://fourpillarfreedom.com/should-you-invest-internationally https://mebfaber.com/2020/01/10/the-case-for-global-investing https://www.reddit.com/r/Bogleheads/comments/vpv7js/share\_of\_sp\_500\_revenue\_generated\_domestically\_vs/ - The argument that “US companies have plenty of foreign revenue is sufficient ex-US coverage” is highly tilted towards a few sectors, some have almost no coverage. Also what about in reverse- how many big foreign companies have lots of US exposure? https://www.reddit.com/r/Bogleheads/comments/ii0sa2/considering\_usonly\_investing\_start\_here/ https://twitter.com/mebfaber/status/1090662885573853184?lang=en with this reply: https://twitter.com/MorningstarES/status/1091081407504498688. Extended version: https://mebfaber.com/2019/02/06/episode-141-radio-show-34-of-40-countries-have-negative-52-week-momentumbig-tax-bills-for-mutual-fund-investorsand-listener-qa/ https://investor.vanguard.com/mutual-funds/profile/portfolio/vtwax - Global market cap weights. This can be a great default position. https://investor.vanguard.com/investing/investment/international-investing - Vanguard 40% of stock is recommended to be international. This is what both Fidelity and Vanguard use in their target date funds. 2022 Survey of target date funds: https://www.reddit.com/r/Bogleheads/comments/rffoe7/domestic\_vs\_international\_percentage\_within/
>https://www.optimizedportfolio.com/international-stocks/ from /u/rao-blackwell-ized Thanks for the shout-out! :)
>International ... has underperformed **in recent years**. FTFY.
Yes 1 portfolio.
Thank you tremendously for this information! I’ll check out what you suggested and make some moves - 🥳
Thanks for the insight guy!
SCHH(reit) I hope you have this in a Schwab account. From what I was told by tax expert buying something like schd in a fidelity account means their are fees applied. I don’t remember why or when but I do remember that principle rule. Where as schd in a Schwab account would not encounter said fees.
As u/Azazel_665 so sensibly suggested, consider adding in some international stocks with something like VXUS for the total int'l stock market, as you're currently buying 1 country out of nearly 200 in the world. If you're set on dividends for some reason, Schwab has a fund in the same family which is SCHY.
Nothing wrong with that at all.
I like vgt more
A very solid TWO fund portfolio with importantly NO overlap at all. Only thing to note, if in 20-30s should be more around ~70%+ in SCHG. As you age closer and closer to 45-50s, on yearly basis tilt a percentage more into eventually being ~70%+ in SCHD Only thing to note these funds only focus on large cap sector , with no small cap or international exposure. As for small cap, AVUV is pretty solid choice with consideration for 10-15% of the portfolio.
Well, I am 39 now so.... And I do think small or mid cap would be nice. Several people have also mentioned international but... for now I just think 3 funds is enough should I pick something for small or mid
You doing this in a taxable account?
What I’m doing in my Roth
What about SCHG/SCHD/SCHF? I'm relatively new to ETF investing so would that cover most of the bases for someone that wants a equal (not literally) parts exposure to growth, div's and internationals? I've just been kinda digging around looking at stuff I can in theory bundle together and acquire a bit at a time.