Why SCHD Failed in 2023 (I finally figured it out)
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- Опубликовано: 14 авг 2024
- SCHD or the Schwab US Dividend Equity ETF greatly underpeformed some of the biggest indexes like the S&P 500 index and the Nasdaq 100 index in 2023. So what happened to everyone favorite dividend ETF last year?
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Would love to know your thoughts on this style of video? I’m trying to be a lot different than other financial RUclipsrs. Let me know if you’re enjoying the format.
If you want to bail on a proven ETF after one crappy year then you’re not ready for investing
SCHD suck, you are not going to reach financial freedom with SCHD.
I have been accumulating on the cheap.
Your channel is so underrated The quality of the information you present is so good, it definitively deserves more views. Thank for the content
Truly appreciate this @Josuegomez3352
! Maybe 2024 will be a good year for the channel.
I second this...
I have a 3 fund portfolio but I have finally decided to invest in ETFs, alongside. I’m looking at SCHD, VOO, XLK or SCHG.
SCHD outperformed VTV over 5 and 10 years and is very low cost. Just had bad luck this year. Many of us have a boatload in the S&P500 index in 401k's, so not having apple, Microsoft etc as top holdings (if at all) in SCHD is a good thing. Still have the bulk of my $500k portfolio in SCHD.
I’m taking the hybrid approach, VOO, SCHD as my foundation, with growth like MA, UNH, HD. And slow growth like O and PEP. I have a 20 year time horizon. But the best part is I still enjoy my life while I do this. Travel, and buy ONLY things I love. It’s the best combo, plus I love the small victories with receiving dividends/dividend growth/share price appreciation.
I think it was the competition with Treasury Bills and money markets that deprived SCHD from growing too. 2024 may be different.
I’ve been diligently working, saving and contributing towards early retirement and financial freedom, but since covid outbreak, the economy so far has caused my portfolio to underperform, do I keep contributing to my 401k or look at alternative sectors to meet my goals?
keep contributing! I'd suggest you consider financial advisory at this point in time, remember you are in for the long haul
I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit me the time to analyze stocks myself. Thankfully, my portfolio has just 5X in barely 5 years, summing up nearly $1m after subsequent investments to date.
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She goes by '‘Nicole Desiree Simon’ I suggest you look her up online. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did
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I have a three fund portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and TSM overlap too much to make sense holding both? However I’ve been in the red for a month now. I work hard for my money, so investing is making me a nervous sad wreck. I don’t know if I should sell everything, sit and just wait but watching my portfolio dwindle away is such an eye -sore.
There are many other interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell the shares or ETFs you want to acquire.
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Great video. Step three is my area of expertise (i.e. taking a nap) lol. I have SCHD and will be sticking with it. 50% SCHD and 50% SP500 index. Let see what 2024 brings.
Hahahaha. You should start a course
It’s not rocket science. SCHD holds mostly very large mature, blue chip companies that have a long track record of paying dividends, and companies that have moved into prioritizing dividends aren’t so much focused on growth or beating revenues in fact most have reached a terminal rate of growth which is why they return a large amount of their revenues back to shareholders in the form of dividends. Those companies also don’t thrive or outperform like technology can in high interest rate & economic downturn environments. It is most closely linked to the Dow Jones, yet it excludes the 2 tech names in the index being Microsoft & Apple which is why it’s compounded annually over the last 5 years at 8% compared to VOO at 12% and QQQ at 20%. Not saying it’s a bad fund, it’s actually more so the perfect fund if you’re retired and don’t want volatility during market downturns while collecting income, but don’t expect it’s returns to beat the market when it has no exposure to what’s driving the growth of the market lol
Great analysis and love all the accompanying cinematography and b-roll footage!
Really glad to hear this. I tried some new approaches in this video. I really liked the result so I may continue with a similar format. 🙂
I'm really blown away with the production quality of your channel for how small you are, keep uploading man you're going to make it if you keep the content as quality as this trust me. You earned yourself a new subscriber
Wow so glad to hear @TJ_G ! Happy the extra effort was noticed. Planning on continuing a similar format for now.
SCHD preformed similar to VIG, DGRO, and SDY. I would only get rid of it if it underperformed against other dividend funds not because the category underperformed.
Wrong. DGRO 10.49% vs SCHD 4.57%.
@@troy_john they were similar in my M1 account but I bought at different times. It would make since for Dgro to outperform since it has MSFT and tech did well last year. I already buy tech in other funds so I don't have a lot of DGRO or VIG, but I keep a little.
VIG is a safer bet but I agree
SCHD didn't fail. It continues to be a winner in my portfolio and will in 2024 as well
A mix of QQQM and SCHD...like 60%/40% respectively is all you need. A one two punch of growth and income with almost no fund overlap.
I trimmed my SCHD shares in my Roth IRA to 100 from 115 now 27.79% my two next highest holdings are State Street S&P 1500 market cap (SPTM) ETF 18.97% State Street S&P 1500 value tilt (VLU) ETF 18.58% (both hold 90% of US stocks) I will use my remaining 2024 Roth IRA contributions to add more to SPTM and VLU to balance my top 3 ETFs out.
First video I've watched from your channel. Love the format brother
Happy to hear that @jsolo890 ! Im planning on making some more videos in this format.
FF to 7:00 When the FED raises rates SCHD will go down and money markets wil pay 5% . 3 months AFTER the FED is done LOWERIng rates usee the cash in the money market to buy SHCD , as inflation rises so will SCHD. When the fed SAYS INFlation IS TO HIGH sell SCHD AND PUT IT ALL BACK IN THE MONEY MARKET which will eventually pay 5% again. This is a cycle that repeats
Interesting. Reminds me of an article I read in 2022 when VZ price kept dropping. The jest of it was the same thing you just said. That as rates kept going up there was no more reason to invest in VZ for a 3% yield (at the time) when they could get more by holding cash.
I do think we have seen SCHD weak point. It’s sensitive to interest rates.
Can you do the same for dgro please
Look at the impact of PFE on SCHD. But your video was fun to watch. SCHD as its name mentions is focused not on growth but to be a diversified dividend ETF. It will usually not do as well as ETFs that are likely to hold positions that are not constrained by dividends. (Such as VOO or its equivalents) But here is my question to you. You seem young. Why do you want dividends or income. At your age, focus on growth. Income is for us Boomers, who do NOT have a FT job anymore, and need the income. You ae right though, when interest rates are high, dividend stocks that focus on income will suffer. (growth stocks less so.) I did subscribe, as I liked the production value, so until next time.
Dividend funds are great when combined with high growth funds like QQQ for barbell investing and rebalanced annually. I combine mine with leveraged funds TQQQ and SOXL. I don't buy them for the dividends, I buy them for their low beta.
@@travismartinson1813 I guess I dont disagree that much but why? You know your return WILL be higher with growth stocks than dividend stocks. You know the main reason companies pay dividends is they feel they do NOT have better alternatives to use their capital, and feel it is better to give capital back to share holders.
@@buyerclub2 I don't want to have a 70% portfolio drawdown from the leveraged ETF's and it increases my Sharpe ratio. I've backtested on portfolio visualizer and I try to get the best Shape/Sortino ratio with the best returns. Dividend funds tend to be negatively correlated to growth funds. I would use bonds but they are screwed up and tend to move with tech stocks now. Adding a little gold seems to help in my backtesting as well. JEPI looks like a good low beta ETF to use instead of the dividend funds, but it doesn't have a very long history to test. I was able to test JEPRX but that only adds a few years. I plan to increase the dividends as I get closer to retirement and don't need the growth. I will also mention that annual rebalancing gave me the best best results in my testing. M1 finance makes it easy to rebalance with just a click. I buy everyday and M1 buys whatever is below my allocation so when the market is up it ends up buying the safer investments and when it's down it buys the more risky ones.
Is there an ETF that screens for consecutive dividends and dividend growth ?? SCHD only counts for consecutive pays during 10+ years
Dude...I love your videos. Please keep going!
So glad to hear this @stephenbishop9362 ! Doing my best to stay consistent and offer good quality videos. Truly appreciate you watching 🙂
In-depth analysis! This video offers valuable insights into why SCHD faced challenges in 2023. A must-watch for investors seeking understanding and strategic lessons. #InvestmentAnalysis
Thanks so much @rahimbah1 !
@@RobbieMoney You are welcome
Nice video, thanks
Thanks for watching 😁
excellent analysis
Thank you!
PFE certainly didn't help! Great video.
Oh definitely not!! Brutal year.
add mgv to schd . check it 40 schd 10 mgv get Berkshire and more we want in schd. then vgt or schg or vug.
No one factors in TBills almost doubling the interest rate or SCHD.
Good call
Good video
Thanks!
Why do dividend stock index go down? ... When a company distributes dividends, it comes out of the company's equity, and so the value of the company comes down too.
It didn't.
SCHD, SCHG & QQQM! 💥😂👍
From May 10th 2021 to now, SCHD's annual average return is 2.99% or a grand total of 8.21% (assuming dividends reinvested). That is very poor performance. So, its not "failed in 2023." SCHD has failed coming up on three years now. But you hang in there and keep believing that SCHD is going to start outperforming as we head into recession.
Got Mag 7 ohhhhh that’s 2 bad bro 😂
😂
sold my 1455 shares of schd.. too kuch risk over 100,000 invested in the market and only thing i got was dividends. missed out on 30-65 thousand dollars i capital growth 😊
Brutal 😂
Some prefer dividend, some prefer growth stocks/funds. Hope whatever you do it makes you lots of money in the future 😁
@bossballheaddawg2588 - didn't you like the way SCHD didn't lose as much in 2022? There is a point to having some low beta in your portfolio.
You “SCHD” move on from it.
😂😂😂
If company is paying dividends it means it’s not growing. Unless u are in retirement dividends stocks are crap. You will make more money buying companies that are still growing.
Dividend stocks are crap, got it. So Microsoft, Apple, and Broadcom are crap.
MA and V too, I guess. Have you seen their charts with approx 15% annual dividend growth rate?
Oh, and someone should tell Buffett that his Billions in annual dividends are from crap companies. Maybe we shouldn't tell him. He might accidentally die from laughter.
Dividends have their place. Maybe not in your portfolio, and that's fine.
2023 was a great year to get dividend payers on sale. Just like 2022 was a great year to get growth stocks on sale.
Apple and Microsoft pay dividends...so this not a 100% true statement about companies that pay dividends.
Meta pays dividend
SCHDs time has come and gone. It was a loser in a great year. Try SCHG instead.
1st
Winner!! 🏆