Any thoughts on portfolio idea w SCHD?
Any thoughts on portfolio idea w SCHD?
I am pretty new to investing, and at first, I got a lot of info from youtube, so naturally, I got hooked into the 3 fund youtube portfolio. (33% VOO, 33% SCHD, 33% SCHG/QQQ). After doing more research, I decided to abandon SCHG. However, I still think that having SCHD might be good because it has decent returns and without it my portfolio would be pretty tech heavy. I'm planning to reinvest dividends for everything as well. I haven't started investing this portfolio yet, but this is my idea:
50.00% Vanguard Total Stock Market Index Fund ETF (VTI)
30.00% Schwab U.S. Dividend Equity ETF (SCHD)
10.00% Vanguard Total International Stock Index Fund ETF (VXUS)
10.00% Vanguard Intermediate-Term Treasury ETF (VGIT)
And most of my cash in:
iShares 0-3 Month Treasury Bond ETF (SGOV)
I know there are little bonds, but I have a lot of time to invest and I don't feel like I need that much bonds at this time. I still have SCHD included because I think it would provide lower volatility and reduce some of the tech weight, add value stocks, and also do better during market downturns. I currently have no debt, and enough cash for emergencies. I'm really just asking about the portfolio, assuming that you have enough cash on hand. What do you guys think of my idea?
50.00% Vanguard Total Stock Market Index Fund ETF (VTI)
30.00% Schwab U.S. Dividend Equity ETF (SCHD)
10.00% Vanguard Total International Stock Index Fund ETF (VXUS)
10.00% Vanguard Intermediate-Term Treasury ETF (VGIT)
And most of my cash in:
iShares 0-3 Month Treasury Bond ETF (SGOV)
I know there are little bonds, but I have a lot of time to invest and I don't feel like I need that much bonds at this time. I still have SCHD included because I think it would provide lower volatility and reduce some of the tech weight, add value stocks, and also do better during market downturns. I currently have no debt, and enough cash for emergencies. I'm really just asking about the portfolio, assuming that you have enough cash on hand. What do you guys think of my idea?
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Re: Any thoughts on portfolio idea w SCHD?
Welcome.
I try to avoid dividends in my taxable account, because they cost me unnecessary taxes.
So, my taxable brokerage account is 100% VTI.
Earning interest in taxable accounts would also cost me unnecessary taxes.
So, all of my fixed income is in my IRA (except for a few hundred dollars in checking account to pay current month expenses).
I try to avoid dividends in my taxable account, because they cost me unnecessary taxes.
So, my taxable brokerage account is 100% VTI.
Earning interest in taxable accounts would also cost me unnecessary taxes.
So, all of my fixed income is in my IRA (except for a few hundred dollars in checking account to pay current month expenses).
Credibility ... some posters have it.
Re: Any thoughts on portfolio idea w SCHD?
I recall someone mentioning they did a blend between 50% SCHD / 50 % VGT in an IRA. Returns looked good. I don't do it and not advocating it. Just passing it along.
Re: Any thoughts on portfolio idea w SCHD?
I also moved a small percentage schwab/VG total stock to SCHD. With all the talk of tech stocks being a large portion of the overall stock market due to valuations I felt like this was a diversification move.
can't say it's panned out one way or another at the moment but it does help me sleep at night.
note , I am also retired and all i have is all i have.
can't say it's panned out one way or another at the moment but it does help me sleep at night.
note , I am also retired and all i have is all i have.
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Re: Any thoughts on portfolio idea w SCHD?
I don't know what your time horizon is for retirement but if you have a long time to go get out of bonds. Any market downturn can/may be made up by the time you have until retirement. I personally don't keep a lot of money in funds except when I was in my 401K but I buy mostly T Bills as they are short term and hold very little to no risk including inflation risk over their short time frame. I do own a little VCLT but that is not our main bond holdings.
You should have cash, but just my opinion but having "cash" in a money market or 1 month T Bill kind of guarantees you enough liquidity that if you do need it it will be available soon enough without price fluctuations that any fund may give you.
As far as SCHD, if you are in a tax bracket that you can utilize the 0% capital appreciation and qualified dividends then it may be a good holding in a taxable account. Most of our money is in a traditional IRA and I hold SCHD there so I can use the 0% rule on whatever dividends I do get along with the capital appreciation in our taxable account. We hold mostly Total Stock Market/ S&P funds, a little SCHG for possibly a little more growth and a little SCHD for the dividends. Right now we are not using the dividends from the stock funds but they are there to use if needed at some point.
You should have cash, but just my opinion but having "cash" in a money market or 1 month T Bill kind of guarantees you enough liquidity that if you do need it it will be available soon enough without price fluctuations that any fund may give you.
As far as SCHD, if you are in a tax bracket that you can utilize the 0% capital appreciation and qualified dividends then it may be a good holding in a taxable account. Most of our money is in a traditional IRA and I hold SCHD there so I can use the 0% rule on whatever dividends I do get along with the capital appreciation in our taxable account. We hold mostly Total Stock Market/ S&P funds, a little SCHG for possibly a little more growth and a little SCHD for the dividends. Right now we are not using the dividends from the stock funds but they are there to use if needed at some point.
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Re: Any thoughts on portfolio idea w SCHD?
The 30% in SCHD is a waste. You already have those companies in VTI.
Rules to investing: |
1. Don't lose money. |
2. Don't forget rule number 1.
Re: Any thoughts on portfolio idea w SCHD?
If I don't include SCHD because of the tax inefficiency, then what fund should I get? I haven't been able to find another fund that will balance my tech heavy portfolio, add more value stocks, have less volatility, and don't have a lot of overlap by weight with VTI.
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Re: Any thoughts on portfolio idea w SCHD?
More VTI. You can also consider increasing the allocation to international stocks (VXUS). Global weighted funds such as VTWAX hold ~35% of equities in foreign stocks.rog29 wrote: Tue Feb 04, 2025 3:18 pm If I don't include SCHD because of the tax inefficiency, then what fund should I get? I haven't been able to find another fund that will balance my tech heavy portfolio, add more value stocks, have less volatility, and don't have a lot of overlap by weight with VTI.
Re: Any thoughts on portfolio idea w SCHD?
OK, but I want to balance the tech with something less volatile so my portfolio isn't too tech heavy. If I buy more VTI, than I fear that my portfolio will have too much tech. I'll probably increase allocation to VXUS to 20 percent though.case_of_ennui wrote: Tue Feb 04, 2025 3:28 pm More VTI. You can also consider increasing the allocation to international stocks (VXUS). Global weighted funds such as VTWAX hold ~35% of equities in foreign stocks.
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Re: Any thoughts on portfolio idea w SCHD?
Why do you fear that, and how did you determine how much is too much?
Re: Any thoughts on portfolio idea w SCHD?
VTI has like 30 percent of tech. I'm new to investing, but I feel like that's a bit too much for one sector.Hyperchicken wrote: Tue Feb 04, 2025 3:37 pm Why do you fear that, and how did you determine how much is too much?
Re: Any thoughts on portfolio idea w SCHD?
I searched for a SCHD substitute some time ago. Settled on DIVO. Take a look.
Re: Any thoughts on portfolio idea w SCHD?
Interesting... I'll consider it.dadjunk wrote: Tue Feb 04, 2025 4:08 pm I searched for a SCHD substitute some time ago. Settled on DIVO. Take a look.
Re: Any thoughts on portfolio idea w SCHD?
You have to put SCHD in a tax-advantaged account, no sense paying taxes.
I'd forget about Int'l, it won't do much. Do you need the Ts?
You should tell us the types of accounts you have...Roth, 401k, etc.
67% in TSM and 33% in SCHD would be awesome...in tax-advantaged.
I'd forget about Int'l, it won't do much. Do you need the Ts?
You should tell us the types of accounts you have...Roth, 401k, etc.
67% in TSM and 33% in SCHD would be awesome...in tax-advantaged.
"I just got fluctuated out of $1,500.", Jerryđź—˝
Re: Any thoughts on portfolio idea w SCHD?
SCHD contrasts nicely as a pairing with VTI. OP and I made similar observations: VTI is getting pretty concentrated in a handful of high-flying tech stocks, which skews its PE ration high (27x). SCHD focuses on dividend growth stocks which tend to skew towards resilient, lower-volatility stocks. It also has a PE ratio (18x) that is more representative of the median PE of the broader market than VTI’s PE.
From my own calculations (take with grain of salt), SCHD had almost the same cumulative 10yr-return as VTI in many scenarios—with/wo dividend taxes or reinvested dividends or was in accumulation or withdrawal mode.
SCHD dividend taxes are so minimal, even at the highest dividend rate, that those effects are lost amidst market fluctuations. Also, non-dividend funds will eventually be taxed at withdrawal making it a wash between the two strategies.
I decided to add SCHD to my portfolio recently. It has been historically a safe bet to buy companies with growing profits at a fair price. Cheers!
From my own calculations (take with grain of salt), SCHD had almost the same cumulative 10yr-return as VTI in many scenarios—with/wo dividend taxes or reinvested dividends or was in accumulation or withdrawal mode.
SCHD dividend taxes are so minimal, even at the highest dividend rate, that those effects are lost amidst market fluctuations. Also, non-dividend funds will eventually be taxed at withdrawal making it a wash between the two strategies.
I decided to add SCHD to my portfolio recently. It has been historically a safe bet to buy companies with growing profits at a fair price. Cheers!