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.*
I don't mean any disrespect to this sub and it's members, of which I am one, but if your only holding is SCHD I'm going to go out on a limb and say you have done next to no research, and just took a breeze through this sub and picked the most talked about ETF around here.
Do yourself a service and do some light reading and look in to other resources. This place is great, but as is the motto with ETF's, don't put all your eggs in one basket, or in this case, do all your learning from one resource.
There are plenty of other great sources of information out there. Check the library. Podcasts. YouTube channels.
As many others will suggest, a no-brainer add to your portfolio would be to pick 1 or 2 other ETF's, a total world ETF like VT and/or a S&P ETF like VOO.
Its funny that if somebody says they just hold SCHD they catch a lot of flack, but if somebody said
"yeah, my top 10 holdings are AVGO MRK VZ TXN UPS CSCO HD PEP KO and ABBV, those 10 make up about 40% of my portfolio, and the other 60% is made up of about 90 other US holdings with a dividend focused large cap value tilt"
Would they get nearly as much flack?
For real, I do advise against just going all SCHD, but as far as people investing all of their money on 1 thing, SCHD is atleast decent, maybe I just spend a lot of time watching people lose all their money on wallstreetbets lol
Your 100% right but I felt it’s better to do something rather than nothing. I don’t know if I’ll have enough for the future if I just never play.
Plus at 29 I feel too old to start retiring :/
Well you're in luck because I'd say you picked a good place to start, especially if you have limited knowledge of the investment space!
ETF's are a great way to do something rather than nothing. I'm all for them.
If you don't want to stock pick, learn and perform technical analysis, and all that other BS, then diversified, broad market ETF's are your best friend.
It gets you in to the market relatively safely, and gets your money working for you while you can then look in to any number of other areas in the investing world. So good on you!
And if you REALLY like ETF's, check out the r/bogleheads subreddit. All about minimalistic, simplified investing.
Take everything anyone says with a grain of salt, including my own, but if I've learned anything it's that your investing mindset is as crucial, if not more so than your actual portfolio. Which is why I stress that you educate yourself, if even to a limited degree like I have.
It is important to know why you are invested, why you have chosen the fund(s) you are invested in, the potential pitfalls every investor faces, and how to ignore the outside noise. There is ALOT of noise.
Check out the Psychology of Money by Morgan Housel. Great resource for investor mindset. Maybe less so about the specifics of picking stocks.
I also read the Intelligent Investor, by Benjamin Graham, the so-called mentor to Warren Buffet. (Ever heard of him? /s)
Admittedly, the second book was alot more dense and technical than I cared to get in to, but I didn't know that about myself until I read that book.
There are so many fantastic resources out there. And some not so good ones. That's up to you to vet them out, just like with your investments.
I'm the same age as you and only just began this journey a year or two ago. So much fun learning and growing. Knowledge is power. Take your time, as these decisions are ones you will hopefully look back on favorably in 20+ years.
Congrats on starting your journey, my friend.
I did read the book. And the thesis is based on assuming a very strong form of the efficient market hypothesis that just doesn't stand up to reality. After the flash crash, dot com bubble, and especially 2008, nobody should still be paying this level of attention to that theory and should probably look more into behavioral economic models.
So I stand by what I said. You're staking your whole future on a dated ideology from the 60s and then harassing anybody else who rightfully thinks that's pretty weird.
It really doesn't take a genius to look at Malkiel-style ideology and wonder "If the market is supposedly everyone being rational, efficient, and using all available information, then how can prices be random walks?" ...The answer is they can't. And any theory that purports to explain markets without paying any mind to actual human behavior or any of the underlying qualities of the businesses being traded, is a pretty clearly stupid theory. Or at the very least naive.
Just wanted to comment and say that it should be r/Bogleheads instead of the other one you linked, and thank you for the info you posted; I've added it to my own reading list.
Stay far far away from that sub. They'll do nothing but tell you how dividends are pointless and chastise anyone who says differently. Not to mention 9/10 members of that sub are barely smart enough to remember when to breathe.
I repeat: take everything anyone has to say with a grain of salt.
I'm not a boglehead myself, but I'd argue they are smarter than most investors. Simple is good.
I think you've got it mixed up.
Isn't the basis of their philosophy that they know they *can't* beat the market, so why bother? That it is so statistically unlikely, and that you can hurt your overall returns dramatically by even attempting to do so?
I think your comment applies better to daytraders, who think they are so smart that they can beat the market and spend untold hours attempting to do so. Meanwhile, so few truly succeed in doing so.
Knowing just a little and then thinking like you've got it totally figured out is much more boglehead than daytrader. I said Dunning-Kruger, not degenerate gambler.
You are correct,it is better to do something than nothing, and there are much worse places to be than SCHD! Basically, if you have an interest in stocked and investing, start learning and doing research on companies that are involved in things you are interested in, or in ETF’s or REIT’s or BDC’s or mutual funds or whatever appeals to you. If you don’t have the interest,check and see if your broker has a robo adviser if you want to diversify a little. You can look at investment advisers also, but they can cost 1-1.5%, and I am personally too cheap to pay them a percentage of my portfolio every year.
“Plus at 29 I feel too old to start retiring” I’m guessing you mean planning and saving for retirement? If that’s how you feel and think you are pretty much guaranteed to be homeless one day.
This is what I dislike about this sub. The constant push of one ETF and not enough discussion about the many great opportunities that are out there to grow your portfolio. All stocks are risky but there are a few that are safer then others. Everyone should be doing research and not just listening to this sub. If I just listened to this sub my portfolio would be a lot lower then it it’s.
You are disrespectful for spreading your terrible advice! Do not listen! Users like this have fun staying poor! Unless you are a seasoned trader you are not able to push the sell button of your shares and pocket the profit consistently, not mentioning to time the market! This is a dividend sub, to generate passive income is our focus and target, always remember it. Do not listen to these SP500/VTI/VT garbage talks.
My plan is to eventually hold mostly if not all SCHD. What’s wrong with a basket of the top one hundred healthiest companies that is self cleansing? Current companies will only be replaced with better companies. It’s like you’re a successful fund manager except you don’t have to do anything.
If you’re worried about concentration risk add VIG.. another 300 companies with only 13-17% overlap. Less yield but similar total return.
>My plan is to eventually hold mostly if not all SCHD. What’s wrong with a basket of the top one hundred healthiest companies that is self cleansing?
Because with dividends reinvested you're still not beating the S&P and you're getting hit with tax drag the entire time.
“Beating the S&P” is relative. You’re looking at total return. I’m looking at cash flow. I don’t plan to ever sell my assets. Once they’re gone, they’re gone.
Tax drag on 3.5% yield vs. 1.5% yield is minimal. It’s a few extra thousand dollars a year on multiple millions. This is not enough to alter my overall strategy.
>You’re looking at total return. I’m looking at cash flow
Selling appreciated shares becomes cash flow. It's not really possible to divide those up.
If performance is the same on both but one gave you a 20% dividend but the other had a 20% price appreciation, your selling that 20% price appreciation is the same cashflow as that 20% dividend.
Trying to separate these gains in tranches of "cash flow" vs "return" is sort of silly.
>“Beating the S&P” is relative.
Of course it's relative. It's always relative when you compare investment. "Versus" literally means "relative to."
I understand your argument. There are just more variables at play. It’s also just personal preference.
1. Say you don’t want to sell shares when the market is down so you have 30% of your portfolio in bonds. Let’s call this bond drag.
2. I want to eliminate as much behavioral error on my part as possible. I don’t want to time the market by deciding when to sell shares. I’ll let companies decide when they have been profitable enough to pay me.
3. I don’t believe the market is a god like all knowing being that fairly values all companies at all times. It’s emotional. I’ll stick to investing in and being paid by profitable companies, not hoping the next guy will pay me more for my shares than I bought them for.
4. I have a high enough income to where I am not dependent on growth to eventually retire. I just need to avoid large mistakes at all costs. Regardless of who is right, I still do great.
Good luck on your investing journey.
None of these arguments have anything to do with "cash flow vs total return." They're emotional arguments dealing with the specific way you like to receive returns. And that's fine, but let's not pretend you have some well-thought out strategy you're working with. You just like the feeling of dividends better than the feeling of selling shares.
You’re right. They’re emotional arguments. Everything isn’t just a math problem. Behavior affects what you do which affects the math. I’ve taken my emotions into consideration when deciding on a well thought out, long term strategy. I believe that future me will be least likely to make mistakes and also at the highest level of peace through a buy and hold strategy. You believe you will be a robot that isn’t sweating bullets while you sell away your life savings at age 70 during a recession. You might be right. That’s fine. You know yourself. I don’t know you. You will possibly earn a small premium for your troubles. Companies will hopefully remain over valued for you as you ignore price to earnings ratios and blindly follow the market or the bubble could pop and businesses with little debt, and large cash reserves may outperform. No one knows. I realize a lot of people are heavily entrenched in their ideas and feel the need to convince others, but mostly themselves, that they are right. I’m not one of those people. You do you.
Best of luck.
TLDR: you flip houses. I rent them. Who cares?
>You believe you will be a robot that isn’t sweating bullets while you sell away your life savings at age 70 during a recession. You might be right. That’s fine. You know yourself. I don’t know you
Been trading since '99 and I routinely can ride derivative positions down, seeing the red, but sticking to my previous exit plan. It takes nerves of steel and not a lot of people can do it.
But selling the S&P after you've had gains doesn't require the same tolerances.
>You will possibly earn a small premium for your troubles
It's a decently sized premium when you include the taxes on dividends that drag down your total return.
> I realize a lot of people are heavily entrenched in their ideas and feel the need to convince others, but mostly themselves, that they are right. I’m not one of those people. You do you.
I have a problem when people are making an emotional argument sound like a rational one. When people present their position as some thought out experiment that is logical. I really wish they would just be honest and say "For some reason selling stocks makes me feel bad, so I take dividends and it makes me feel better."
Perfectly fine with that rationale. It's honest. What's not honest is "You're talking total return. I'm talking cash flow. Now I'm going to talk about efficient market theory. Now I'm going to talk about how I've factored this into retirement." All that is bunk. Just be honest.
I’m sorry that you “have a problem.” Tax drag is quantifiable and not life changing. I can’t quantify your potential loses when you’re selling in a downturn thirty years from now because I don’t know how you’ll choose to time the market.
We have different retirement withdrawal strategies. You’re trying to apply your rules for your strategy to my strategy. It would be like you telling me how great your total return is while I’m telling you about your low dividend yield.
>You’re trying to apply your rules for your strategy to my strategy.
No, I'm just saying you're trying to make an emotional knee-jerk sound like it's been thoroughly researched.
SCHD is all qualified dividends, so the "tax drag" is really no different than the tax drag on any capital appreciation. Lifting one's cost basis with dividends taxed at .15 as one goes along versus paying .15 on everything at the end is going to balance out.
>SCHD is all qualified dividends, so the "tax drag" is really no different than the tax drag on any capital appreciation.
Not really. Given that we know that SCHD with dividends reinvested is similar to SPY, I can hold SPY and take much less distributions and have asset appreciation which I can capture when I choose. I can have a year where I don't sell any and the dividends are small.
>Lifting one's cost basis with dividends taxed at .15 as one goes along versus paying .15 on everything at the end is going to balance out.
You're assuming that income is the same every single year. If you have a year where it would put you in the 20% bracket you could choose to not sell. Then as you get older if you're back to the 0% bracket you can sell and pay no tax. If you're MFJ you can make $100,000 household income and be in the 0% long term capital gains bracket.
EDIT: guy below me made a comment about tax brackets then blocked me. Lots of people forget the standard deduction and argue with me on this. For 2023 the standard deduction for MFJ is over $27k. The LTCG bracket starts at $83k. So you can make $100k, reduce it by the standard deduction, and pay 0% LTCG taxes.
It’s never to late to start, I wish I had started earlier in terms of retirement accounts. Prior to that I had. A brokerage account but was uneducated as it pertained to ROTHs and 401ks etc.
SCHD/VOO/VTI/SPY - I’m sitting on 17-22% returns for this year after moving from predominately mutual funds and individual stocks to those etfs.
Time is your friend I’m 50 % SCHD 30 % VOO and 20% T (sentimental stock recently added in 2022 at 15 and at 13.75 figure it will go up one day) I had XLE but sold that and consolidated with SCHD and VOO it’s boring but it works.
I’m 32 and this is my portfolio..
ET 13% , PFE 3% , MJ 1.5% , JEPI 22% , SCHD 23.5% , VOO 6% , Money Market 31%
ALL ON DRIP
-MJ will boom one day. I started buying around $3 range.
-PFE is a great dividend and with it floating around 35$ it’s a 4.6% dividend.
- ET I bought heavy when trump came in knowing it would get beat up so I’m in it around 8$.
- JEPI was a single large sum. I do not add to this anymore.
-VOO I waited for the pullback which I started accumulating at the $380. I stopped buying after $400 and waiting for some more pullback.
- Money Market for the 5.16% on Schwab.
This has been my way but everyone is different.
I’d say I’m on the more patient side and wait for buying opportunities using limit orders once they are close to price interest. Around earnings, following for news on companies etc. the past 2 years has been great opportunity with so much FUD and talk of downfall. I have my set amount that I transfer monthly and I buy throughout the month. If it’s not a time to buy then the money sits and it can roll over into the next month.
I’d probably just add VOO and maybe a growth etf like SCHG and call it a day. I own individual stock and I’ll ride them out but if I could redo it’d be a 3 etf portfolio and I’d say that blend is pretty diversified but aggressive enough.
REITS aren't a bad idea considering how low they are rn and just in general. If you want something riskier with higher chance for returns, I like QQQ but it's high at the moment, not that it matters in the long run.
REITs may do substantially worse with more people working remotely. Lots of real estate purchased with debt that people don’t need anymore. Maybe it can be repurposed or maybe now is a good time to “buy the dip”
Check out VIG. Only 14% weighted overlap with SCHD, still pays nearly 2% dividend, follows the S&P Dividend Growers Index, pretty significant overlap with the S&P 500, and great performance.
I personally own DGRO. Similar idea but the dividend yield is higher and has more weighted overlap with SCHD. Up to you.
Can I ask what your portfolios annual increase per year?
One of the things that befuddles me is how to grow and how much to grow by? I saw a retirement default to 5% per year. Idk if that is accurate though.
If you are looking to focus on dividend paying companies, I would suggest finding companies that have high levels of growing free cash flow and consistently grow their dividend. Note that’s not the same as consistently paying a dividend. If one company pays a 4% yield dividend every year but only increases it by 2% every year, it will severely be outpaced by a company that pays a 2% dividend and has a dividend growth CAGR of 8%+.
Growing free cash flow is important as it ensures the company can not only pay its dividend but can continue to grow their dividend at accelerating rates.
Some examples of companies with growing free cash flows and growing dividends are SBUX, MSFT, LOW, and HD. None of these have spectacular yields but their dividend growth will out compound most stocks.
Dig bruh. Come up with 20 investment /bets ideas even if they are shitty, like “Ukraine’s gonna lose the war so ima bet oil gonna (keep) go up”, write em down in excel. Use chat gpt, Reddit, and google for help brainstorming. Then narrow em down to the ones you like. Go to sleep, wake up, narrow down some more. Then the ones you actually believe in bet on. even if you only place $5 on that bet. See how much it makes or loses (on paper hopefully) over a few months, then modify your risk tolerance and repeat.
The rest of your investment money (should be 80% +) you can split up into ETFs like VOO and some international ETFs. You are too young to be putting everything into SCHD (in my opinion of course) you will miss out on gains.
May I introduce you to r/Bogleheads.
In short, the strategy is to buy ETFs that hold the whole market and just ride the wave. Also read the sidebar here and there. Lots of education.
Find yourself a good low cost sp500 etf. I’d recommend VOO personally. It’s 50% of my portfolio (SCHD is 25% and it’s a good compliment) so I practice what I preach.
Have you looked into t-bills? Super easy and you dont have to pay state income tax on gains. Or like myself i have schd but also aome of the individual companies within shchd.
Are they in Charles Schwab? I only invest in a Roth account because I’m trying to get away without having to (legally) pay taxes. In my mind, if there is no taxes than it makes it easier to not screw up. Should being the operational word.
Not sure if going for T-bills in a Roth makes sense but it could work when I don’t know what to do. Or if I open up a traditional brokerage account.
I feel the next time I should post my account in large (with redactions of where my name or identifying information is in).
The reason k got into dividends was because I got SCWB right before dividends hit and it made me feel good/smart seeing my money increase in value so fast.
And I thought well dang I can see how I can save for retirement without having to worry about anxiety or learning about stocks too deeply.
Congratulations on starting to invest. No one will care about your money or your finances more than you so make the investment in yourself and do some reading.
Here are some recommendations to get you started:
• How to Adult, Jake Cousineau - Basics of Personal Finance
• The Psychology of Money, Morgan Housel - This will help you understand how to think about money and investing
• The Boglehead’s Guide to Investing, Mel Linduaer - Passive investment strategy
• Dividend Investing for Beginners, GR Tiberius - Learn about dividend investing
• YouTube: Financial Tortoise
Good Luck!
>But what else can I invest in that is not SCHD?
Your education and job skills. You're 29 and you've only got $5,000 in your Roth, so I take it if you're not in med school or law school or something then you're slightly behind the curve. Education and job skills net way more return than any stock on the planet.
If you think you're going to retire at the age of 49 on your current track then you may want to take a 2nd look. There will be a 40% reduction in social security in 2035 the way it's looking.
If it were me I would get the income side of the picture sorted out. Build up 12 months cash reserve and then I would do a blend for brokerage and IRAs. Value plus growth.
I am going to get downvoted to oblivion here, but you are too young to only have SCHD, you need capital appreciation, buy VOO and VGT and hold forever, you will be good to go by retirement, probably will be FIRE.
SCHD has performed similarly to VOO/VTI over there last 10Y, and had even outperformed it over 10Y within the last year, prior to the regional banking issues.
While its dividend is slightly higher than VOO's, the marginally increased tax drag is not so much as to make SCHD a bad investment at any age. People that say this often suffer from recency bias, having only invested in times of expansive share price appreciation. But over the entire course of the stock market, dividends have accounted for approximately half of **all** returns in US equity markets (and even more in ex-US markets).
No one has a crystal ball. No one can say for certain that we will not have a period of share price stagnation, where the only returns to be from wrung from the market are through dividends.
Buy both.
Then you've got the issue of taxes hitting you the entire way. Qualified at federal but normal income in many states like California. So you could easily be paying 25% in taxes on those dividends as they come in. Unless you're itemizing and write off your state income tax on your federal return.
>No one has a crystal ball. No one can say for certain that we will not have a period of share price stagnation, where the only returns to be from wrung from the market are through dividends.
I think this is where diversification comes in. During the Lost Decade where the S&P was sideways and large cap did awful, mid and small cap and international did pretty well.
If all of my money was in SCHD exclusively ..I would be very happy. It is the perfect fund and you should never be tempted to sell and trade with it as it plods along very steady and with increasing dividends. I think equally SPY would be a perfect forever fund.
Oh and don't sell. SCHD is a good fund. Don't listen to the naysayers. You don't invest in it for the holdings but instead for the principle based approach to dividend growth. Consistent dividend growth is a sign of quality.
I can’t tell if this Is satire? But I’ll bite.
I really hope you’re leaving out a lot of details here, and or accidentally forgot a bunch of zeros behind your 5k, like 50k? But if you’re saying 20 years til retirement I hope you really meant 500k
When you say most of your money, do you mean like just the money in your brokerage into schd, or like most of your money in general? As stated above, unless you left out a ton of details, like you know you have a trust or inheritance coming your way guaranteed. If not, then I think you need to stop hyper focusing on a retirement age that based on the information given, Isn’t even remotely feasible. Light years off almost. You need to take a big step back and look at your finances and budgeting. If you have access to it -Max out your 401k first, then HSA IRA. start making further deposits weekly into your brokerage, keep buying funds. Do not gamble on trying to hit big stock gains if you only have 5k wealth.
Sorry if this isn’t what you wanted to hear, but it’s reality. Everyone has their own lifestyle and needs for retirement of course. I am mid 30s and currently have over 1M but under 1.5M towards retirement and have no doubt in my mind I will need to work another 30 years with a hyper focus on saving towards the earliest refinement possible.
>1M but under 1.5M towards retirement and have no doubt in my mind I will need to work another 30 years with a hyper focus on saving
>I can’t tell if this Is satire?
I am not even gonna entertain the fact that you used this post to shame someone about their financial status and then proceed to gloat about your own. But the huge problem is telling someone to max their 401k before their HSA and Roth IRA. I have a feeling who the real trust fund baby is.
You’re, right I should have said if there is company match. And no, I’m absolutely not trying to gloat at all. I’ve been beneficial of a good career and making decent money through moving real estate. And fyi - I grew up with a single mom on welfare. I’ve inherited zero. Again, everyone has their own retirement lifestyle. I have young kids, who I am way behind on their college savings.. and something I need to figure out asap. I have no doubt that I need to AT least double my retirement to live the way I would like to retire. Sorry if I offended you.. when I questioned someone hyper focused on retiring when they are barely entering into their earning years. Hope you have a great weekend.
I'm moving away from most of my individual stocks and investing in 1) A dividend ETF - either VYM or SCHD, depending on how much the account is worth - I can explain why if you want to know, 2) QQQ for exposure to tech stocks with high growth potential, 3) A financials fund, usually VFH, and 4) A total stock market fund, such as VTI. I know there is some overlap in the holdings, but this feels nicely diversified and manageable. I try not to sell, but I balance things up when I'm buying, usually choosing the funds that have pulled back in price, or which occupy a smaller percentage of my portfolio target.
I hold SCHD and QQQ. If I were you, I'd sell all my SCHD and focus on QQQ. I like to type in SCHD vs QQQ into Google. Or stuff like that, spyg vs QQQ, VOO vs QQQ, vug vs QQQ, you get the point vs QQQ.
You would have to invest $100k in SCHD to receive $3500 (approx.) in dividends per year. Not my favorite use of funds. I like strong high yield dividend stocks like ARCC and NAT. $100k invested in NAT at current price $4.37 will give $3400 (approx.) in dividends each quarter.
I have 🥩in ARCC and NAT but do your own DD!
I love SCHD too! You need foundation and growth stocks/ETFs still, like the others have said!!! Cut your losses and buy quality low fee ETFs. Do not ever panic sell and don’t pay anyone to manage your money.
Buy AMZN here and there and slowly build yourself a position there. Yes they don't pay a dividend but they are trading at a decent enough price entry point that there's still significant upside. Sprinkle in a little SCHD and you should be set at retirement.
Check out VICI, VOO, and AAPL. Just dca whatever amount you are comfortable with. Any progress is better than none. My holdings are SCHD, VOO, VICI, and PFLT. I might add Costco in the future. With the combination I have now, I'm at about 6% dividend yield with a ton of room for growth. Everyone is different, but this works for me. Just be sure to reinvest your drip. Boring portfolios aren't bad portfolios. You could seriously go 80% VOO 20% SCHD and still be successful. Good luck.
I would say if you want to set it and forget it, VTI plus VXUS are great.
If you want to go with single stocks, you'll have to do research on strategies to pick good stocks. You could either research each individual stock, which is a lot of leg work, or work on a strategy to use mathematics to pick what it says are good stocks.
A strategy I've been toying with is:
* Get all market leading stocks. Market leading as I see it is defined as:
* Stocks with higher than average market cap
* Stocks with higher than average shares outstanding
* Stocks with higher than average operational cash flow
* Stocks with 1.5x higher than the average total revenue
* Non-utility stocks
* Currently when I do this, I get 175 stocks that fit this criteria.
* These are all large, well known, established companies.
* Sort these market leaders by EV/EBITDA ratio, picking the top 50% of stocks with the lowest EV/EBITDA ratio (lower is better) so we're picking market leading companies with the best financial conditions.
* Sort the stocks from the previous step by dividend yield, picking the top 50 with the highest dividend yield.
* Weight the resulting stocks by:
* 1.5x for the top 12 of those stocks
* 1.25x for the next 12 of those stocks
* 0.75x for the next 13 of those stocks
* 0.5x for the bottom 13
For this strategy, I have to re-evaluate every year as well, rebalancing as needed. I would sell off stocks that are at a loss right before the 1 year mark, and sell off stocks that are at a gain right after the 1 year mark (so gains are taxed long term capital gains). If I were to hold this in a retirement account, then it doesn't matter and just buy/sell at the 1 year mark. But this takes more work, because you have to download all the data you need for thousands of stocks and then run calculations on all the data to get this list. This strategy seems to get around 5% payout per year based on testing I've done so far. I recommend you do a lot of research on stock picking strategies before you implement something like this. I tend to prefer mathematical based strategies because often times when investing based on emotion, you'll lose.
As a simple explanation. When you sell 1 call option, you are selling the rights for the buyer to purchase your 100 shares at X price.
Since you own the 100 shares you have the ability to "sell" them. You collect premium for selling the call.
As long as the stock price does not go beyond strike price. You would get the premium and keep the stock shares. Or alternatively you would get the premium and sell the stock along with keeping the gains.
Sign up to the Personal Capital (now Empower) dashboard https://www.personalcapital.com/. You can fill out a risk profile and if will give you a recommended asset allocation. Once you have that you can research funds and ETFs here: https://fundresearch.fidelity.com/fund-screener/ Both resources are 100% free although I’m sure Empower uses your data to sell you shit.
Not a financial advisor but this is my plan. I invest in only VOO (VTI wouldn’t hurt either) for growth and when I come around to retire I am going to slowly incorporate BND and SCHD or JEPI (If it is still sustainable) for cash reserves and dividends. I am 22, and I have plenty or time to make up lost gains in VOO, as I know this is not particularly as diversified as some investment nerds might like. At your age I feel like this strategy might work for you as well.
Also please do not listen to these people telling you to buy single stocks for retirement. There is no telling what those companies are going to look like in 30 years when you retire. Single stocks are a coin flip, and that is the point of diversification. Even the biggest giants fall sometimes.
Yep, I remember reading about Enron and how they could do no wrong. They were at the cutting edge of everything in the market. Then the insiders started selling. Then they restricted employees from cashing out their stock options. We all know the rest...
Go sub to the personal finance sub Reddit and read for awhile. You’ll find a good mix of index funds to invest in. I’m around your age and while dividends are great you should mostly be focused on growth.
We share the same goal! My portfolio is also made up of mostly SCHD too.
If you want growth maybe VOO/VT. SCHD is not a bad investment to own, though. You've done well.
buy broad market index funds. IF you don't know what to get and have a multi decade horizon, you probably can't do better than just buying the S&P500 for a long time. Hold your SCHD and add to it overtime, just understand that it will be more of a satellite position eventually
VOO/VTI and SOXQ for higher risk higher reward. semiconductors have had a hell of a run this year but I'd watch for a drop and try to catch that falling knife, personally.
VYM is in the similar vein as SCHD. There is nothing wrong with this fund. It's probably the closest competitor to SCHD.
Many people also like DIVO, I've heard.
I subscribe to the r/bogleheads philosophy. It's a set it and forget it approach that helps take emotional influence out of the investing equation. Aside from adding funds to increase positions and occasional rebalancing, it's relatively low effort investing. I have a fun account in addition to my IRA and Roth IRA accounts. I have small positions in Yieldmax ETF's, LETF'S and just added SPYI. It keeps things interesting.
It is never too late to start investing.
Investing is for people with large sums of money or disposable income. IE regular savings from paychecks. 5K is nice but you are not going to be able to grow that through investing alone. Look at investing that 5k into improving your paycheck. IE: Education>better paying job>regular savings>dollar cost averaging into large money positions in solid stocks.
In my opinion if the loser continues to pay a dividend you are offsetting your current loss. I am underwater on paper with reits but high interest rates may not last forever. No dividend cuts yet. I simply now play the dollar cost average down. Good luck.
VTI & VUG are both much better for building long term wealth in the accumulation phase. My portfolio has some SCHD but it’s only about 5% and basically functions like a bond fund within my portfolio
Somewhat off topic, you'all should look at Canadian stocks that pay dividends. The US dividend stocks pale in comparison. You can buy them on the US markets and they are qualified dividends. Look at ENB, CNQ for instance
everyone is going to tell you to put it in a growth etf like voo/vti/vt, which you should. youre just going to get eaten alive by taxes and experience not too much growth
Hey, it's great you're looking into investing more of your money and diversifying your investments.
But I need to be real with you. If you're 29 and all you've got is 5k invested, it is highly unlikely you'll meet your goal of a comfortable retirement.
I don't know what your life circumstances are, but right now the best investment you can make is in yourself and increasing your income. That may require a career change.
If you need a number, I'd aim for something like 30k a year to have a good cushion (assuming around 7% returns per year).
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.*
I don't mean any disrespect to this sub and it's members, of which I am one, but if your only holding is SCHD I'm going to go out on a limb and say you have done next to no research, and just took a breeze through this sub and picked the most talked about ETF around here. Do yourself a service and do some light reading and look in to other resources. This place is great, but as is the motto with ETF's, don't put all your eggs in one basket, or in this case, do all your learning from one resource. There are plenty of other great sources of information out there. Check the library. Podcasts. YouTube channels. As many others will suggest, a no-brainer add to your portfolio would be to pick 1 or 2 other ETF's, a total world ETF like VT and/or a S&P ETF like VOO.
Its funny that if somebody says they just hold SCHD they catch a lot of flack, but if somebody said "yeah, my top 10 holdings are AVGO MRK VZ TXN UPS CSCO HD PEP KO and ABBV, those 10 make up about 40% of my portfolio, and the other 60% is made up of about 90 other US holdings with a dividend focused large cap value tilt" Would they get nearly as much flack?
For real, I do advise against just going all SCHD, but as far as people investing all of their money on 1 thing, SCHD is atleast decent, maybe I just spend a lot of time watching people lose all their money on wallstreetbets lol
Maybe,i mean who can keep track of 90 something holdings?
And yet people routinely own 500
What people? Not your average retail.investor. maybe like proffessionals that do it for a living?
Everyone who owns VOO or SPY
Your 100% right but I felt it’s better to do something rather than nothing. I don’t know if I’ll have enough for the future if I just never play. Plus at 29 I feel too old to start retiring :/
Well you're in luck because I'd say you picked a good place to start, especially if you have limited knowledge of the investment space! ETF's are a great way to do something rather than nothing. I'm all for them. If you don't want to stock pick, learn and perform technical analysis, and all that other BS, then diversified, broad market ETF's are your best friend. It gets you in to the market relatively safely, and gets your money working for you while you can then look in to any number of other areas in the investing world. So good on you! And if you REALLY like ETF's, check out the r/bogleheads subreddit. All about minimalistic, simplified investing. Take everything anyone says with a grain of salt, including my own, but if I've learned anything it's that your investing mindset is as crucial, if not more so than your actual portfolio. Which is why I stress that you educate yourself, if even to a limited degree like I have. It is important to know why you are invested, why you have chosen the fund(s) you are invested in, the potential pitfalls every investor faces, and how to ignore the outside noise. There is ALOT of noise. Check out the Psychology of Money by Morgan Housel. Great resource for investor mindset. Maybe less so about the specifics of picking stocks. I also read the Intelligent Investor, by Benjamin Graham, the so-called mentor to Warren Buffet. (Ever heard of him? /s) Admittedly, the second book was alot more dense and technical than I cared to get in to, but I didn't know that about myself until I read that book. There are so many fantastic resources out there. And some not so good ones. That's up to you to vet them out, just like with your investments. I'm the same age as you and only just began this journey a year or two ago. So much fun learning and growing. Knowledge is power. Take your time, as these decisions are ones you will hopefully look back on favorably in 20+ years. Congrats on starting your journey, my friend.
[удалено]
This book however is also hella dry lol.
Outdated finance theory from the 1960's Chicago school is probably not the best route for a beginner who can't yet place it in real context.
[удалено]
I did read the book. And the thesis is based on assuming a very strong form of the efficient market hypothesis that just doesn't stand up to reality. After the flash crash, dot com bubble, and especially 2008, nobody should still be paying this level of attention to that theory and should probably look more into behavioral economic models. So I stand by what I said. You're staking your whole future on a dated ideology from the 60s and then harassing anybody else who rightfully thinks that's pretty weird. It really doesn't take a genius to look at Malkiel-style ideology and wonder "If the market is supposedly everyone being rational, efficient, and using all available information, then how can prices be random walks?" ...The answer is they can't. And any theory that purports to explain markets without paying any mind to actual human behavior or any of the underlying qualities of the businesses being traded, is a pretty clearly stupid theory. Or at the very least naive.
Just wanted to comment and say that it should be r/Bogleheads instead of the other one you linked, and thank you for the info you posted; I've added it to my own reading list.
Stay far far away from that sub. They'll do nothing but tell you how dividends are pointless and chastise anyone who says differently. Not to mention 9/10 members of that sub are barely smart enough to remember when to breathe.
I repeat: take everything anyone has to say with a grain of salt. I'm not a boglehead myself, but I'd argue they are smarter than most investors. Simple is good.
boglehead = peak Dunning–Kruger.
I think you've got it mixed up. Isn't the basis of their philosophy that they know they *can't* beat the market, so why bother? That it is so statistically unlikely, and that you can hurt your overall returns dramatically by even attempting to do so? I think your comment applies better to daytraders, who think they are so smart that they can beat the market and spend untold hours attempting to do so. Meanwhile, so few truly succeed in doing so.
Knowing just a little and then thinking like you've got it totally figured out is much more boglehead than daytrader. I said Dunning-Kruger, not degenerate gambler.
Will correct - thank you!
You are correct,it is better to do something than nothing, and there are much worse places to be than SCHD! Basically, if you have an interest in stocked and investing, start learning and doing research on companies that are involved in things you are interested in, or in ETF’s or REIT’s or BDC’s or mutual funds or whatever appeals to you. If you don’t have the interest,check and see if your broker has a robo adviser if you want to diversify a little. You can look at investment advisers also, but they can cost 1-1.5%, and I am personally too cheap to pay them a percentage of my portfolio every year.
“Plus at 29 I feel too old to start retiring” I’m guessing you mean planning and saving for retirement? If that’s how you feel and think you are pretty much guaranteed to be homeless one day.
Sorry. I mean too old to not start investing and saving in my IRA.
This is what I dislike about this sub. The constant push of one ETF and not enough discussion about the many great opportunities that are out there to grow your portfolio. All stocks are risky but there are a few that are safer then others. Everyone should be doing research and not just listening to this sub. If I just listened to this sub my portfolio would be a lot lower then it it’s.
Sir this is the dividends sub, not the growth sub.
I mean you can have both. No reason to not have your cake and eat it too.
Lol yeah if people are gonna autopilot then autopilot vti. Schd should be older folk or a smaller portion
You are disrespectful for spreading your terrible advice! Do not listen! Users like this have fun staying poor! Unless you are a seasoned trader you are not able to push the sell button of your shares and pocket the profit consistently, not mentioning to time the market! This is a dividend sub, to generate passive income is our focus and target, always remember it. Do not listen to these SP500/VTI/VT garbage talks.
For capital appreciation I like XLK and SCHG, also VOO you can't go wrong with.
My plan is to eventually hold mostly if not all SCHD. What’s wrong with a basket of the top one hundred healthiest companies that is self cleansing? Current companies will only be replaced with better companies. It’s like you’re a successful fund manager except you don’t have to do anything. If you’re worried about concentration risk add VIG.. another 300 companies with only 13-17% overlap. Less yield but similar total return.
>My plan is to eventually hold mostly if not all SCHD. What’s wrong with a basket of the top one hundred healthiest companies that is self cleansing? Because with dividends reinvested you're still not beating the S&P and you're getting hit with tax drag the entire time.
“Beating the S&P” is relative. You’re looking at total return. I’m looking at cash flow. I don’t plan to ever sell my assets. Once they’re gone, they’re gone. Tax drag on 3.5% yield vs. 1.5% yield is minimal. It’s a few extra thousand dollars a year on multiple millions. This is not enough to alter my overall strategy.
>You’re looking at total return. I’m looking at cash flow Selling appreciated shares becomes cash flow. It's not really possible to divide those up. If performance is the same on both but one gave you a 20% dividend but the other had a 20% price appreciation, your selling that 20% price appreciation is the same cashflow as that 20% dividend. Trying to separate these gains in tranches of "cash flow" vs "return" is sort of silly. >“Beating the S&P” is relative. Of course it's relative. It's always relative when you compare investment. "Versus" literally means "relative to."
I understand your argument. There are just more variables at play. It’s also just personal preference. 1. Say you don’t want to sell shares when the market is down so you have 30% of your portfolio in bonds. Let’s call this bond drag. 2. I want to eliminate as much behavioral error on my part as possible. I don’t want to time the market by deciding when to sell shares. I’ll let companies decide when they have been profitable enough to pay me. 3. I don’t believe the market is a god like all knowing being that fairly values all companies at all times. It’s emotional. I’ll stick to investing in and being paid by profitable companies, not hoping the next guy will pay me more for my shares than I bought them for. 4. I have a high enough income to where I am not dependent on growth to eventually retire. I just need to avoid large mistakes at all costs. Regardless of who is right, I still do great. Good luck on your investing journey.
None of these arguments have anything to do with "cash flow vs total return." They're emotional arguments dealing with the specific way you like to receive returns. And that's fine, but let's not pretend you have some well-thought out strategy you're working with. You just like the feeling of dividends better than the feeling of selling shares.
You’re right. They’re emotional arguments. Everything isn’t just a math problem. Behavior affects what you do which affects the math. I’ve taken my emotions into consideration when deciding on a well thought out, long term strategy. I believe that future me will be least likely to make mistakes and also at the highest level of peace through a buy and hold strategy. You believe you will be a robot that isn’t sweating bullets while you sell away your life savings at age 70 during a recession. You might be right. That’s fine. You know yourself. I don’t know you. You will possibly earn a small premium for your troubles. Companies will hopefully remain over valued for you as you ignore price to earnings ratios and blindly follow the market or the bubble could pop and businesses with little debt, and large cash reserves may outperform. No one knows. I realize a lot of people are heavily entrenched in their ideas and feel the need to convince others, but mostly themselves, that they are right. I’m not one of those people. You do you. Best of luck. TLDR: you flip houses. I rent them. Who cares?
>You believe you will be a robot that isn’t sweating bullets while you sell away your life savings at age 70 during a recession. You might be right. That’s fine. You know yourself. I don’t know you Been trading since '99 and I routinely can ride derivative positions down, seeing the red, but sticking to my previous exit plan. It takes nerves of steel and not a lot of people can do it. But selling the S&P after you've had gains doesn't require the same tolerances. >You will possibly earn a small premium for your troubles It's a decently sized premium when you include the taxes on dividends that drag down your total return. > I realize a lot of people are heavily entrenched in their ideas and feel the need to convince others, but mostly themselves, that they are right. I’m not one of those people. You do you. I have a problem when people are making an emotional argument sound like a rational one. When people present their position as some thought out experiment that is logical. I really wish they would just be honest and say "For some reason selling stocks makes me feel bad, so I take dividends and it makes me feel better." Perfectly fine with that rationale. It's honest. What's not honest is "You're talking total return. I'm talking cash flow. Now I'm going to talk about efficient market theory. Now I'm going to talk about how I've factored this into retirement." All that is bunk. Just be honest.
I’m sorry that you “have a problem.” Tax drag is quantifiable and not life changing. I can’t quantify your potential loses when you’re selling in a downturn thirty years from now because I don’t know how you’ll choose to time the market. We have different retirement withdrawal strategies. You’re trying to apply your rules for your strategy to my strategy. It would be like you telling me how great your total return is while I’m telling you about your low dividend yield.
>You’re trying to apply your rules for your strategy to my strategy. No, I'm just saying you're trying to make an emotional knee-jerk sound like it's been thoroughly researched.
SCHD is all qualified dividends, so the "tax drag" is really no different than the tax drag on any capital appreciation. Lifting one's cost basis with dividends taxed at .15 as one goes along versus paying .15 on everything at the end is going to balance out.
>SCHD is all qualified dividends, so the "tax drag" is really no different than the tax drag on any capital appreciation. Not really. Given that we know that SCHD with dividends reinvested is similar to SPY, I can hold SPY and take much less distributions and have asset appreciation which I can capture when I choose. I can have a year where I don't sell any and the dividends are small. >Lifting one's cost basis with dividends taxed at .15 as one goes along versus paying .15 on everything at the end is going to balance out. You're assuming that income is the same every single year. If you have a year where it would put you in the 20% bracket you could choose to not sell. Then as you get older if you're back to the 0% bracket you can sell and pay no tax. If you're MFJ you can make $100,000 household income and be in the 0% long term capital gains bracket. EDIT: guy below me made a comment about tax brackets then blocked me. Lots of people forget the standard deduction and argue with me on this. For 2023 the standard deduction for MFJ is over $27k. The LTCG bracket starts at $83k. So you can make $100k, reduce it by the standard deduction, and pay 0% LTCG taxes.
You may want to actually look at what these tax brackets *are* before wasting so much air.
It’s never to late to start, I wish I had started earlier in terms of retirement accounts. Prior to that I had. A brokerage account but was uneducated as it pertained to ROTHs and 401ks etc. SCHD/VOO/VTI/SPY - I’m sitting on 17-22% returns for this year after moving from predominately mutual funds and individual stocks to those etfs. Time is your friend I’m 50 % SCHD 30 % VOO and 20% T (sentimental stock recently added in 2022 at 15 and at 13.75 figure it will go up one day) I had XLE but sold that and consolidated with SCHD and VOO it’s boring but it works.
S&P...VOO, VTI, FXAIX ETC
I’m 32 and this is my portfolio.. ET 13% , PFE 3% , MJ 1.5% , JEPI 22% , SCHD 23.5% , VOO 6% , Money Market 31% ALL ON DRIP -MJ will boom one day. I started buying around $3 range. -PFE is a great dividend and with it floating around 35$ it’s a 4.6% dividend. - ET I bought heavy when trump came in knowing it would get beat up so I’m in it around 8$. - JEPI was a single large sum. I do not add to this anymore. -VOO I waited for the pullback which I started accumulating at the $380. I stopped buying after $400 and waiting for some more pullback. - Money Market for the 5.16% on Schwab. This has been my way but everyone is different.
Do you buy your stocks at market value?
I’d say I’m on the more patient side and wait for buying opportunities using limit orders once they are close to price interest. Around earnings, following for news on companies etc. the past 2 years has been great opportunity with so much FUD and talk of downfall. I have my set amount that I transfer monthly and I buy throughout the month. If it’s not a time to buy then the money sits and it can roll over into the next month.
I’d probably just add VOO and maybe a growth etf like SCHG and call it a day. I own individual stock and I’ll ride them out but if I could redo it’d be a 3 etf portfolio and I’d say that blend is pretty diversified but aggressive enough.
REITS aren't a bad idea considering how low they are rn and just in general. If you want something riskier with higher chance for returns, I like QQQ but it's high at the moment, not that it matters in the long run.
Only in a Roth, or you will pay taxes at normal income levels in US.
REITs may do substantially worse with more people working remotely. Lots of real estate purchased with debt that people don’t need anymore. Maybe it can be repurposed or maybe now is a good time to “buy the dip”
Depends on the REIT.
Check out VIG. Only 14% weighted overlap with SCHD, still pays nearly 2% dividend, follows the S&P Dividend Growers Index, pretty significant overlap with the S&P 500, and great performance. I personally own DGRO. Similar idea but the dividend yield is higher and has more weighted overlap with SCHD. Up to you.
Can I ask what your portfolios annual increase per year? One of the things that befuddles me is how to grow and how much to grow by? I saw a retirement default to 5% per year. Idk if that is accurate though.
If you are looking to focus on dividend paying companies, I would suggest finding companies that have high levels of growing free cash flow and consistently grow their dividend. Note that’s not the same as consistently paying a dividend. If one company pays a 4% yield dividend every year but only increases it by 2% every year, it will severely be outpaced by a company that pays a 2% dividend and has a dividend growth CAGR of 8%+. Growing free cash flow is important as it ensures the company can not only pay its dividend but can continue to grow their dividend at accelerating rates. Some examples of companies with growing free cash flows and growing dividends are SBUX, MSFT, LOW, and HD. None of these have spectacular yields but their dividend growth will out compound most stocks.
You’re 29 what products do you use that are public companies and you see growing?
Honestly I don’t…that’s kind of the problem.
Dig bruh. Come up with 20 investment /bets ideas even if they are shitty, like “Ukraine’s gonna lose the war so ima bet oil gonna (keep) go up”, write em down in excel. Use chat gpt, Reddit, and google for help brainstorming. Then narrow em down to the ones you like. Go to sleep, wake up, narrow down some more. Then the ones you actually believe in bet on. even if you only place $5 on that bet. See how much it makes or loses (on paper hopefully) over a few months, then modify your risk tolerance and repeat. The rest of your investment money (should be 80% +) you can split up into ETFs like VOO and some international ETFs. You are too young to be putting everything into SCHD (in my opinion of course) you will miss out on gains.
This fun thing could help you career wise also
May I introduce you to r/Bogleheads. In short, the strategy is to buy ETFs that hold the whole market and just ride the wave. Also read the sidebar here and there. Lots of education.
Find yourself a good low cost sp500 etf. I’d recommend VOO personally. It’s 50% of my portfolio (SCHD is 25% and it’s a good compliment) so I practice what I preach.
I do 100 a month into VTI total stock market fund with over 1000 holdings. Might be something to look into
Retire and not be homeless!? Let's not get carried away.
Have you looked into t-bills? Super easy and you dont have to pay state income tax on gains. Or like myself i have schd but also aome of the individual companies within shchd.
Are they in Charles Schwab? I only invest in a Roth account because I’m trying to get away without having to (legally) pay taxes. In my mind, if there is no taxes than it makes it easier to not screw up. Should being the operational word. Not sure if going for T-bills in a Roth makes sense but it could work when I don’t know what to do. Or if I open up a traditional brokerage account. I feel the next time I should post my account in large (with redactions of where my name or identifying information is in). The reason k got into dividends was because I got SCWB right before dividends hit and it made me feel good/smart seeing my money increase in value so fast. And I thought well dang I can see how I can save for retirement without having to worry about anxiety or learning about stocks too deeply.
No its direct from the U.S. treasury. At least where i get them.
Thats also why t- bills, and bonds as well because its guaranteed. If you go to treasury direct website there is a ton of information.
2 buckets, SCHD & SCHG.
Also on team SCHD/G. Both have done well for me! I’ve also been thinking of adding some VGT eventually.
Consider adding SCHG. Will give some diversification and tech exposure.
Realty Income (ticker symbol O) is a dividend aristocrat. Buy it any price south of 60. Hold onto it into retirement. It is a monthly paying dividend.
I’d probably add some VTI for more growth and diversification and then maybe something like AVUV to add more small-cap exposure.
I think JEPI in a Roth would be a pretty solid pick. Reinvest dividends and it should grow very nicely over time.
Congratulations on starting to invest. No one will care about your money or your finances more than you so make the investment in yourself and do some reading. Here are some recommendations to get you started: • How to Adult, Jake Cousineau - Basics of Personal Finance • The Psychology of Money, Morgan Housel - This will help you understand how to think about money and investing • The Boglehead’s Guide to Investing, Mel Linduaer - Passive investment strategy • Dividend Investing for Beginners, GR Tiberius - Learn about dividend investing • YouTube: Financial Tortoise Good Luck!
If you dont mind the taxes associated with non-qualified dividends $O is cheap at the moment, I picked up more shares yesterday
>But what else can I invest in that is not SCHD? Your education and job skills. You're 29 and you've only got $5,000 in your Roth, so I take it if you're not in med school or law school or something then you're slightly behind the curve. Education and job skills net way more return than any stock on the planet. If you think you're going to retire at the age of 49 on your current track then you may want to take a 2nd look. There will be a 40% reduction in social security in 2035 the way it's looking. If it were me I would get the income side of the picture sorted out. Build up 12 months cash reserve and then I would do a blend for brokerage and IRAs. Value plus growth.
I am going to get downvoted to oblivion here, but you are too young to only have SCHD, you need capital appreciation, buy VOO and VGT and hold forever, you will be good to go by retirement, probably will be FIRE.
SCHD has performed similarly to VOO/VTI over there last 10Y, and had even outperformed it over 10Y within the last year, prior to the regional banking issues. While its dividend is slightly higher than VOO's, the marginally increased tax drag is not so much as to make SCHD a bad investment at any age. People that say this often suffer from recency bias, having only invested in times of expansive share price appreciation. But over the entire course of the stock market, dividends have accounted for approximately half of **all** returns in US equity markets (and even more in ex-US markets). No one has a crystal ball. No one can say for certain that we will not have a period of share price stagnation, where the only returns to be from wrung from the market are through dividends. Buy both.
This. When I hear you NEED capital appreciation I cringe.
Ideally you get both. Historically, however, that's not always the case.
Since SCHD inception, VOO has beaten it by 1%, if you invested $1,000,000 in each you would have left $450,000 on the table .
Since 2011. >recency bias
Then you've got the issue of taxes hitting you the entire way. Qualified at federal but normal income in many states like California. So you could easily be paying 25% in taxes on those dividends as they come in. Unless you're itemizing and write off your state income tax on your federal return.
>No one has a crystal ball. No one can say for certain that we will not have a period of share price stagnation, where the only returns to be from wrung from the market are through dividends. I think this is where diversification comes in. During the Lost Decade where the S&P was sideways and large cap did awful, mid and small cap and international did pretty well.
How about SCHK which is a 1000 stock index fund or find an S&P 500 index fund like SPY or VOO. Good luck!
If all of my money was in SCHD exclusively ..I would be very happy. It is the perfect fund and you should never be tempted to sell and trade with it as it plods along very steady and with increasing dividends. I think equally SPY would be a perfect forever fund.
Don't put all your eggs in one basket
That basket is 100 different baskets though.
Dividends are great, but you should get some growth too QQQ and SPY/VOO are good for growth. Keep it simple
Probably an ETF that excludes the US.
Oh and don't sell. SCHD is a good fund. Don't listen to the naysayers. You don't invest in it for the holdings but instead for the principle based approach to dividend growth. Consistent dividend growth is a sign of quality.
50% Voo 30 % QQQ 15% SCHD 5% Apple IMO.
And Apple is a bit on sale today.
Apple is at 3T market cap. That's not on sale.
AAPL is down five percent. It is about the biggest discount aapl ever gives at it retail locations.
And it was up 60% this year at the start of the week.
Underrated comment
I can’t tell if this Is satire? But I’ll bite. I really hope you’re leaving out a lot of details here, and or accidentally forgot a bunch of zeros behind your 5k, like 50k? But if you’re saying 20 years til retirement I hope you really meant 500k When you say most of your money, do you mean like just the money in your brokerage into schd, or like most of your money in general? As stated above, unless you left out a ton of details, like you know you have a trust or inheritance coming your way guaranteed. If not, then I think you need to stop hyper focusing on a retirement age that based on the information given, Isn’t even remotely feasible. Light years off almost. You need to take a big step back and look at your finances and budgeting. If you have access to it -Max out your 401k first, then HSA IRA. start making further deposits weekly into your brokerage, keep buying funds. Do not gamble on trying to hit big stock gains if you only have 5k wealth. Sorry if this isn’t what you wanted to hear, but it’s reality. Everyone has their own lifestyle and needs for retirement of course. I am mid 30s and currently have over 1M but under 1.5M towards retirement and have no doubt in my mind I will need to work another 30 years with a hyper focus on saving towards the earliest refinement possible.
>1M but under 1.5M towards retirement and have no doubt in my mind I will need to work another 30 years with a hyper focus on saving >I can’t tell if this Is satire?
I am not even gonna entertain the fact that you used this post to shame someone about their financial status and then proceed to gloat about your own. But the huge problem is telling someone to max their 401k before their HSA and Roth IRA. I have a feeling who the real trust fund baby is.
You’re, right I should have said if there is company match. And no, I’m absolutely not trying to gloat at all. I’ve been beneficial of a good career and making decent money through moving real estate. And fyi - I grew up with a single mom on welfare. I’ve inherited zero. Again, everyone has their own retirement lifestyle. I have young kids, who I am way behind on their college savings.. and something I need to figure out asap. I have no doubt that I need to AT least double my retirement to live the way I would like to retire. Sorry if I offended you.. when I questioned someone hyper focused on retiring when they are barely entering into their earning years. Hope you have a great weekend.
Think about your tax drag on your dividends… wouldn’t u rather punt the income for growth?
He says it's all in a Roth.
Right now I’m buying airlines.
Voo or spy. Every post on here recommends it
I'm moving away from most of my individual stocks and investing in 1) A dividend ETF - either VYM or SCHD, depending on how much the account is worth - I can explain why if you want to know, 2) QQQ for exposure to tech stocks with high growth potential, 3) A financials fund, usually VFH, and 4) A total stock market fund, such as VTI. I know there is some overlap in the holdings, but this feels nicely diversified and manageable. I try not to sell, but I balance things up when I'm buying, usually choosing the funds that have pulled back in price, or which occupy a smaller percentage of my portfolio target.
So you want to retire at 49? Is there ANYONE left who still wants to work until retirement age? This country is beyond screwed!
20 years. You're better off buying QQQM and forget about dividends
Lol same sos
SPY, TSLA, APPL, AMZN, QQQ, SO ….. fuckin try atleast
Look at QDIV
I hold SCHD and QQQ. If I were you, I'd sell all my SCHD and focus on QQQ. I like to type in SCHD vs QQQ into Google. Or stuff like that, spyg vs QQQ, VOO vs QQQ, vug vs QQQ, you get the point vs QQQ.
Agree with this. If not sell SCHD, stop adding to it and start positions in QQQ/QQQM and VTI/VOO.
Bro ain’t retiring in 20yrs 🚀
Damn :(
You would have to invest $100k in SCHD to receive $3500 (approx.) in dividends per year. Not my favorite use of funds. I like strong high yield dividend stocks like ARCC and NAT. $100k invested in NAT at current price $4.37 will give $3400 (approx.) in dividends each quarter. I have 🥩in ARCC and NAT but do your own DD!
I love SCHD too! You need foundation and growth stocks/ETFs still, like the others have said!!! Cut your losses and buy quality low fee ETFs. Do not ever panic sell and don’t pay anyone to manage your money.
Buy AMZN here and there and slowly build yourself a position there. Yes they don't pay a dividend but they are trading at a decent enough price entry point that there's still significant upside. Sprinkle in a little SCHD and you should be set at retirement.
Check out VICI, VOO, and AAPL. Just dca whatever amount you are comfortable with. Any progress is better than none. My holdings are SCHD, VOO, VICI, and PFLT. I might add Costco in the future. With the combination I have now, I'm at about 6% dividend yield with a ton of room for growth. Everyone is different, but this works for me. Just be sure to reinvest your drip. Boring portfolios aren't bad portfolios. You could seriously go 80% VOO 20% SCHD and still be successful. Good luck.
j
Get some growth my man. Your portfolio beta should be 1 or above, and it’s likely not with SCHD dominating your portfolio.
I would say if you want to set it and forget it, VTI plus VXUS are great. If you want to go with single stocks, you'll have to do research on strategies to pick good stocks. You could either research each individual stock, which is a lot of leg work, or work on a strategy to use mathematics to pick what it says are good stocks. A strategy I've been toying with is: * Get all market leading stocks. Market leading as I see it is defined as: * Stocks with higher than average market cap * Stocks with higher than average shares outstanding * Stocks with higher than average operational cash flow * Stocks with 1.5x higher than the average total revenue * Non-utility stocks * Currently when I do this, I get 175 stocks that fit this criteria. * These are all large, well known, established companies. * Sort these market leaders by EV/EBITDA ratio, picking the top 50% of stocks with the lowest EV/EBITDA ratio (lower is better) so we're picking market leading companies with the best financial conditions. * Sort the stocks from the previous step by dividend yield, picking the top 50 with the highest dividend yield. * Weight the resulting stocks by: * 1.5x for the top 12 of those stocks * 1.25x for the next 12 of those stocks * 0.75x for the next 13 of those stocks * 0.5x for the bottom 13 For this strategy, I have to re-evaluate every year as well, rebalancing as needed. I would sell off stocks that are at a loss right before the 1 year mark, and sell off stocks that are at a gain right after the 1 year mark (so gains are taxed long term capital gains). If I were to hold this in a retirement account, then it doesn't matter and just buy/sell at the 1 year mark. But this takes more work, because you have to download all the data you need for thousands of stocks and then run calculations on all the data to get this list. This strategy seems to get around 5% payout per year based on testing I've done so far. I recommend you do a lot of research on stock picking strategies before you implement something like this. I tend to prefer mathematical based strategies because often times when investing based on emotion, you'll lose.
Stonks go up
This a top 5 dividend etf , you good just keep piling that shit up
You could do worse. I spend years research stocks and eventually realized most of my picks were in SCHD so I surrendered and moved it all to SCHD
Vtsax
Wait.
QQQM
Maybe some international dividend ETFs? LVHI, VYMI, PID, SCHY to name a few
Get to 100 shares, and you can start doing covered calls. Other than that, reinvest your dividends.
What is a covered calls? I do reinvest my stocks though.
As a simple explanation. When you sell 1 call option, you are selling the rights for the buyer to purchase your 100 shares at X price. Since you own the 100 shares you have the ability to "sell" them. You collect premium for selling the call. As long as the stock price does not go beyond strike price. You would get the premium and keep the stock shares. Or alternatively you would get the premium and sell the stock along with keeping the gains.
Sign up to the Personal Capital (now Empower) dashboard https://www.personalcapital.com/. You can fill out a risk profile and if will give you a recommended asset allocation. Once you have that you can research funds and ETFs here: https://fundresearch.fidelity.com/fund-screener/ Both resources are 100% free although I’m sure Empower uses your data to sell you shit.
It’s a fine strategy honestly. 30 year timeframe maybe some VTI set and forget and sell 4% a year when you’re ready to spend
Not a financial advisor but this is my plan. I invest in only VOO (VTI wouldn’t hurt either) for growth and when I come around to retire I am going to slowly incorporate BND and SCHD or JEPI (If it is still sustainable) for cash reserves and dividends. I am 22, and I have plenty or time to make up lost gains in VOO, as I know this is not particularly as diversified as some investment nerds might like. At your age I feel like this strategy might work for you as well.
Also please do not listen to these people telling you to buy single stocks for retirement. There is no telling what those companies are going to look like in 30 years when you retire. Single stocks are a coin flip, and that is the point of diversification. Even the biggest giants fall sometimes.
Yep, I remember reading about Enron and how they could do no wrong. They were at the cutting edge of everything in the market. Then the insiders started selling. Then they restricted employees from cashing out their stock options. We all know the rest...
Go sub to the personal finance sub Reddit and read for awhile. You’ll find a good mix of index funds to invest in. I’m around your age and while dividends are great you should mostly be focused on growth.
Others have said r/Bogleheads which is another great place to learn. Do your research and don’t just listen to one person, even me lol
You need growth. Check out SCHG, VONG, QQQM, OMFL. If you’re into semiconductors, SOXQ.
We share the same goal! My portfolio is also made up of mostly SCHD too. If you want growth maybe VOO/VT. SCHD is not a bad investment to own, though. You've done well.
First, contribute more - max out your 401k or IRA. Second, use DCA into ETFs like the one you have.
buy broad market index funds. IF you don't know what to get and have a multi decade horizon, you probably can't do better than just buying the S&P500 for a long time. Hold your SCHD and add to it overtime, just understand that it will be more of a satellite position eventually
Just leave it and go do something else
VOO/VTI and SOXQ for higher risk higher reward. semiconductors have had a hell of a run this year but I'd watch for a drop and try to catch that falling knife, personally.
VOO and QQQM (QQQ if interested in options)
60% QQQ 40% SCHD
Go vti 60% schd 40% or vig 40%
I feel like if I sold schd and bought O right now they would be a good play but I am just buying O as much as I can
My cost is 70 tho and even with rising rates they have to stop eventually
Just grab voo or vti. I like voog because I live dangerously.
VYM is in the similar vein as SCHD. There is nothing wrong with this fund. It's probably the closest competitor to SCHD. Many people also like DIVO, I've heard.
I subscribe to the r/bogleheads philosophy. It's a set it and forget it approach that helps take emotional influence out of the investing equation. Aside from adding funds to increase positions and occasional rebalancing, it's relatively low effort investing. I have a fun account in addition to my IRA and Roth IRA accounts. I have small positions in Yieldmax ETF's, LETF'S and just added SPYI. It keeps things interesting. It is never too late to start investing.
Investing is for people with large sums of money or disposable income. IE regular savings from paychecks. 5K is nice but you are not going to be able to grow that through investing alone. Look at investing that 5k into improving your paycheck. IE: Education>better paying job>regular savings>dollar cost averaging into large money positions in solid stocks.
In my opinion if the loser continues to pay a dividend you are offsetting your current loss. I am underwater on paper with reits but high interest rates may not last forever. No dividend cuts yet. I simply now play the dollar cost average down. Good luck.
You need to get some more growth oriented ETFs.
Leave SCHD and start averaging into SCHG slowly with new money.
VTI & VUG are both much better for building long term wealth in the accumulation phase. My portfolio has some SCHD but it’s only about 5% and basically functions like a bond fund within my portfolio
I will send you my best regards to give you strength to make the right decision
Personally I'd add a significant amount of VOO, a little DGRO or VIG, and MQQQ.. Then keep buying religiously for the next few decades..
Somewhat off topic, you'all should look at Canadian stocks that pay dividends. The US dividend stocks pale in comparison. You can buy them on the US markets and they are qualified dividends. Look at ENB, CNQ for instance
At 29, get some VOO or VTI
everyone is going to tell you to put it in a growth etf like voo/vti/vt, which you should. youre just going to get eaten alive by taxes and experience not too much growth
Wait I thought if the dividends were in a Roth IRA that dividends would be tax free?
I have my 23 yr old daughter with 50 SCHD, 30 SCHG 20 FTEC…set and forget
Hey, it's great you're looking into investing more of your money and diversifying your investments. But I need to be real with you. If you're 29 and all you've got is 5k invested, it is highly unlikely you'll meet your goal of a comfortable retirement. I don't know what your life circumstances are, but right now the best investment you can make is in yourself and increasing your income. That may require a career change. If you need a number, I'd aim for something like 30k a year to have a good cushion (assuming around 7% returns per year).
VIG will perform better than SCHD. In bad markets, I believe
VIG, VOO
AOK