SCHD Protects Your Portfolio Value & Cash-Flow Better Than Bonds

I started my personal investment journey as a Booglehead in 2021. I bit the bullet and sold my BND fund a few months ago. The dividends I will make from SCHD in the first year, should make up for my bond loss. I couldn't justify keeping the bond index in the hopes it would get back in the green someday.

Nice

SCHD wasn’t around in during the financial crisis of 2007-2009, but other dividend funds were… like VYM. It’s hard to know how much protection you may get in another recession. VYM had a max drawdown during 2007-2009 of just over 51% compared to the S&P of just over 50%. Just saying…

Hi Jeff! I am new to my Roth IRA and I have FCNTX, VYM, and SCHD. My asset allocations say I have 96 % in bonds. I am 56 yrs.old and was wondering how do I get a 90 stck 10 other than a bond percent wise? Also, I think the Fcntx has a 0.39% net fee so should I sell my 9 shared and get out and get someone like VTI or Voo? Thank you for your help!

I'm using etfs to supplement my retirement income.

I love this take

Thanks for the vid! If you were retired would you still recommend this over a bond fund for stability ? Shcd is now down 3%. Obviously everyone is different but as a general rule what would be a good allocation ie 30% equities, 60% schd, 10% cash ?!

Instead of bonds, I still use VUSXX instead of HYSA for an emergency fund for someone in the highest tax bracket. What do you use and do you think this is a good idea?

You seem to really drive home the selling point to SCHD is the limited downside. The fact that it diversifies technology makes is a perfect complement to my growth holdings as I need to start moving money from growth to stable income for retirement. People could pay financial advisors a lot of money for this advice. Thanks Jeff!

I believe you will hit your goal
Next month. 3 for 1 Split!! Hehe

Your new goal should be now 30,000 shares!

There are big differences between investing in bond ETFs and purchasing individual bonds. When held to maturity, you get the entire bond face value back so it's possible to not lose any value in down years if you plan your bond maturities appropriately.

Good strategy Jeff. However Bonds can be good short term investments with less volatility. Good example is when interest rates are declining - bond values go up. Again a cyclical trade but one concept in our arsenal of investment strategies - esp. for those in or close to retirement. Using Long-term Bond ETFs allows in and out investing without needing to hold the actual bonds. Instead of BND which is generic bond fund, use a fund like a TLT which holds long-term bonds more sensitive to interest rate changes. Not investment advice just something to consider.

Really informative video Jeff..thank you! For high income earners (500K plus), do you see value in holding tax-exempt type bonds (VWIUX)? Or do you still think SCHD is a better option? Still 10 years away from retirement.

Man I really want to enjoy this video but how can you even begin to compare these statistics when schd hasn’t even been around long enough to create viable metrics for crashes etc? The stock market has crashed up to 90% in the past has it not? (1932) how would a person reasonably be able to survive for example if they retired with a 100% stock portfolio? And this happened again? Don’t get me wrong I also love schd and heavily invest in it but not having a long term record to back test against is a point that shouldn’t be overlooked.

Bonds 🤢🤢🤢

I’m new to investing and have been loving these videos. I appreciate how you talk to me like a 5 yr old without purposely talking to me like I’m a 5 yr old 😂.. clear and simple presentation.. new subscriber here, looking forward to more.. thank you

Hey Jeff, I have been looking at starting an investment fund for my daughter. I am looking at VOO and DGRO. Maybe also SCHD. Where can I find a stocks/ETF dividend growth rate? Also, where can I find an easy to use a dividend growth calculator? You channel has gotten be thinking more about dividend growth vehicles for my daughter as she has decades. Thanks in advance.

There was no mention of the value of bonds when the fed starts cutting rates. There is a place for bonds.

I agree with you 100%. Bonds suck. In my 3 area portfolio, I hold SCHD for the income portion, S&P 500 for the base portion, and various growth holdings. Bonds have been hit hard as the Fed interest rates climbed. SCHD has grown and so have the div's. Much better win. Thanks for your insight. Cheers

Can anyone answer this question just so I’m 100% sure. If you are in a regular IRA and over 60 can you sell an etf short within 3 months without getting taxed on the Capital gain?

$.8249 !!! Can’t wait for your video on SCHD!

Love your channel, in a Roth, will I pay taxes from dividends from a vehicle such as jepq or qyld since they are non qualified or does it not matter because it’s from a Roth
Thank you much

Do you know why SCHD is dropping? Is it because they dropped AVGO, which has jumped, and put BMY in its place, which is on a long downtrend?

Thanks Jeff! Hope your family is well.
How or what is the best compare contrast: schd vs jepq

Impressive backtest results! It's great to see how SCHD can provide stable income and protect portfolio value. If you're looking for another way to protect your portfolio, consider investing in crypto through a tax-advantaged IRA with My Digital Money.

Jeff, could you review on one of your videos SPDG
SPDR Portfolio S&P Sector Neutral Dividend ETF
Thanks for your educational videos.

Thanks Jeff awesome video as always! Do you have any thoughts on RDVY? I have been buying it in my portfolio as the value dividend ETF to counterbalance my growth ETFs, similar to the role of SCHD you are describing here.

1880 - SCHD , 75 - VGT, 100 - QQQM .... counting... will re-invest all the dividends .. thanks for all your videos

Excelente !!

Thanks for the excellent episode!

Do you also like SCHD in tax deferred accounts or do you prefer higher yield covered call dividend ETFs like JEPQ or JEPI since the qualified dividends of SCHD don’t provide any tax benefit?

Hi, as a UK investor with only a small portfolio, but nearing retirement, what would be the best UK equivalent to SCHD? thanks for a great video :)

SCHD just paid $0.8241/share, unbelievable :-)

Seeing the market this past month. I see that SCHD stayed flat and negative most of the time, but when the S&P 500 and Nasdaq went down, SCHD went up. Could SCHD be considered as a hedge as well?

Hi Jeff, assuming that SCHD dividend future growth rate is 10% per year and 0 for JEPQ, with the current share price (1 share SCHD = about 1.42 share JEPQ) and dividend payment of JEPQ and SCHD (JEPQ dividend = 1.82 SCHD dividend), it seems it will take SCHD about 10 years to produce the same dividend amounts that JEPQ current generates if equal $ amounts are invested. If this is the case, should we also keep JEPQ as a long term player rather than just a short term cash generator. With SCHD recent dividend growth rate, it may take even more than 10 years for SCHD to catch up with JEPQ in terms of dividends. I have both JEPQ and SCHD in my portfolio, I love SCHD, but also feel I should keep both there long term as my dividend ETF.

12 years is woefully insignificant for a comparison like this.

Bonds are useful for reducing sequence risk near or early in retirement. SCHD doesn't replace that. Comparing the past 10 years of returns is completely irrelevant.

Great video man and I couldn't agree more!

Schd and jepq my combination

Great info and just subbed to the channel. Would love to see that same data just with dividends re-invested. I’d be willing to bet schd would give VOO a run for its money.

SCHD is having a day today!!! Been buying more as it fell recently. Timely video!

Hi Jeff. Nice info. I have 25% in SCHD but stopped buying since February because of underperformance (plus tax on dividends in taxable accounts). do you have information how dividend ETFs performed compared with bond ETFs during crashes of 2001 and 2009 (if any dividend ETFs existed at that time obviously)? I was actually considering to convert my Roth (10% of portfolio) to treasuries or TIPS (and if stock market drops I could sell those and buy cheaper stocks. Right now we can buy treasuries with 4.5-5% coupon and if interest rates go down those treasuries will go up in value. in 2022 bonds went down because they had very bad yield to start with

What is the max dividend that schd can grow to? It can’t grow forever. 5%? 6%? Great video Jeff! We’ll know in a few days when schd announces. I’m excited.

Great video - I'm glad to see a clear rationale and compelling data behind a use case for SCHD over bonds. You've sold me on this strategy! (thanks for kinda previewing it last week in our comment exchange ;) )

I think the next one needs to be on why you don’t hold international funds. I agree with your strategy. As most of my US stocks are already international as well.

I've been watching for a while now and I think this is one of your best videos yet.

What percentage of your portfolio is in Schd?

Retiring in 2 months and I Approve (and Like) this message.

Loved the video, thanks for all of the good info.

(I could do without the dramatic background music though, kind of distracting)