Schd is the value ETF is doing exactly what is designed to be it buy stocks when they’re undervalued and sells them when they’re overvalued. It has run neck and neck with the S&P 500 for over a decade until AI came out and all the big tech stocks got 100s of percent. This is not sustainable. The market runs in cycles and money will eventually rotate back.
A good counterpoint. And you're right about the rotate back as the market broadens out beyond the Mag 7. IMO some of these picks were just underwhelming. There are other undervalued industries and companies that will definitely benefit from the rotation back. But for me, I didn't want to take another year to wait for the right mix here when I didn't see it happening. Let's see what March 2025 looks like with this one... thanks for the comment!
I hold SCHD as a value based dividend growth ETF and hedge - case in point, yesterday. Tech drops 3%, the S&P drops 1.5%, and FDVV drops 1%, but SCHD gains 1.35%. And long term, SCHD has performed very well. The thing I don't like about FDVV is that the dividend growth rate is not strong, and can be negative. I understand your point though, and to each their own. No investor is the same.
SCHD is not going to perform well in a tech heavy/growth rally - which is what we have been in for the last 3 years. This will change once value stocks stop under performing and catch up with their very long term trends.
It’s possible, yes. Given the significant investments in tech and AI for the next few years it could take awhile to catch up… maybe a decade or more. Makes sense to wait?
I hear ya where you don't like certain stocks and don't like what they removed/passive methodology. But another way of looking at it for me at least is, well, I don't agree with everything they do, but I want more diversification in my dividend stocks with a low expense ratio.
Hi Dream, Another great video, just a little confused though, what are you suggesting, ALTs like DIVO, VYM? or SPY itself, which is not dividend oriented. Also, I really want to listen your take on High Yield Dividend ETFs, like SPYI, JEPQ (I know you did a few videos on it), ISPY, XDTE etc.
Hi 👋 yes the comparisons shown could be alt considerations to SCHD. On the others… I’m long JEPQ and did you see my other video on XDTE and QDTE? If not, check it out!
ThanX Dream... Another great video.... I do hold SCHD but I have had some thoughts about their ability going forth..... I do hold several CC ETF's like QQQI, SPYI, GPIX, GPIQ, JEPQ, DIVO and recently added IWMI... Looking into IDVO and QDVO also..... QUESTION... In the later years or retirement years - what percentage amount of your portfolio and the CC ETF's would you hold....??? I am working hard to try and keep things balanced and do not want to overdo it.... Thanks Dream... Keep up the great work....
Good question! As you know I’m not an advisor… but IMO, the cc ETFs are in many respects less risky than holding individual stocks. So in my case I have quite a high percentage. You can do the math on my percentage via my last portfolio reveal if you want. But I’m headed to a place where I have most of my portfolio in cc or regular ETFs.. and the rest in cherry picked growth/quality stocks and cash for opportunities and CSPs.
@ thank you Dream. I have been thinking about that angle with majority of ETF’s, CC ETF’s and some favorite individuals as satellites. Yes, understood on non advice. Only entertainment. I do always enjoy your thoughts and insights on the world of finance. Very much appreciated. Please be well.
I sold SCHD in November. It felt stagnant to me. Your analysis is spot on & the best explanation for why I sold it. You've also given me something to think about in FDVV. Thanks, Dream 📊📈♥
I had a large amount of my net worth in SCHD. The reason I held it was that for a few years, it had a nice div growth run. The problem was that it was inconsistent. I dumped everything into VTI and never looked back. Now I am trying to build up a position in JEPQ, QQQI, and PCN. These among others will fund my old age expenses.
This is the problem with a rules based index. The comment that you made around 1.15-1.22 referring to context of the market and how these rules ignore the market per se is gold. This is one of the problems with indexing. If you follow the rules blindly on an specially made index, you might get rid of good companies and add struggling companies.
The analysis feels solid. The title feels click-bait-y. It would be interesting to revisit this at the end of the year to see if your underperformance prediction holds up. I totally agree with just about everything you said in here. Especially about AVGO. I picked some up when Chuck Carnavale was talking about it on the FASTGraphs channel a few years ago and i cannot imagine selling it anytime soon. When you buy SCHD you buy the screen. I think a lot of people learned that last year. I think one great use of that ETF is as a genesis for ideas of current out of favor but solid long term buys. Given SCHD's low concentration of holdings in any one stock you can use it as a core holding and if there are any new additions that look particularly tasty, double down on those and hold the stock in addition to the ETF.
I like what you said about "shopping" for undervalued opportunities inside the screen this fund does for you. Makes sense as then you can apply your own expertise and theories. Thanks for the comment!
Just in time Video. I have been reading on X that it's a must have and I have been against it. I'd rather hold $SCHG. Bottomline, you gave me options to move from $IWMI Thank you Thank you Thank you Love you!💌💌💌
Excellent! Everyone should pay close attention to the holdings and the mix, and how that changes annually for some funds. And determine for themselves if they like the risk v. reward dynamic. It's a personal choice!
I was also concerned about SCHD buying Legget & Platt and Hershey, and selling better positions. As Mr. Spock would say: "Most illogical." I consider my SCHD position as fully funded at 1,000 shares, and won't be adding. And will definitely consider Divo and other options. I actually added 2 lone shares of SCHG the other day, to monitor that one -- you're beating the S&P, and still has fairly low risk.
This is exactly the takeaway I was hoping people would have... that there is an annual reconstitution that bears paying attention to with a fund like this, and some others too. You must continue to pay attention and see if the mix and weighting fits your thesis. Else, you commit to the concept and hold for the super long term, and understand the risk v. reward dynamic.
@ I’m definitely diversifying now, I had Schd,Schy I’m going to add Vym and fdvv with qqqm, Schd is my biggest position so now I won’t add anymore to it except the dividend drip
Another loser in SCHD's holdings that needs go is Cracker barrel in addition to leg, honestly i would prefer them to hold a lot more than 100 holdings. I dont know why more than a couple of these dividend etfs limit themselves to 100 when obviously their quality algorithm is far from perfect . there's plenty more than 100 to hold and still maintain quality. im assuming leg and cracker barrel will certainly get kicked according to the algorithm this march. still tho i have observed same as you as FDVV. that said i dont think i will exit schd just add more to my complimenting positions. another one i hold that has done great is TDIV
CBRL is only 0.05% of SCHD. LEG is only 0.05% also. You are worried about 2 stocks that are less than 0.1% of the portfolio. Their algorithm proves for the last 15 years that SCHD can compete well with SPY (well until the AI bubble showed up). Why add more companies that will just dilute the portfolio and will not boost performance? The top 10 stocks consists of 40% of SHCD. Adding 100 more will not make any difference if each additional new stock will be only about 0.05% of the portfolio. We do not need more stocks for diversification. If I want diversification, I buy VTI
I have a personal question. At work were you ever aware that people were not paying attention to what you had to say but instead focused on your voice? 🤣
1. Just check top 20 holdings and don't worry about LEG or IIPG. Top 20 is about 71% of SCHD. The remaining 80 stocks will not make a significant difference. Yes, they have VZ in top 20 but that is 1 out of 20. 2. SCHD might not be right for you but it is perfect for me to diversify and hedge my tech heavy stock portfolio. SCHD has 19% financials, 17% health care and 15% consumer staples. If you need tech exposure, do not buy SCHD. Get XLK instead 4. I wonder why you do not show the 5 year performance where SCHD beat VYM and DGRO. You cannot go wrong with any 3 of them. It depends on what you have. If you already have SPY, it is better to get SCHD because SCHD overlaps with SPY about 7% only. SPY has 43% overlap with DGRO and 33% with VYM. You do not diversify much with DGRO/ VYM & SPY. 3. FDVV & SCHD composition is different. FDVV has 27% tech (yes including NVDA, AVGO, MSFT) SCHD 8% The last 3 years, tech outperforms any other industries. FDVV has 10% utilities SCHD almost none. That utilities stocks might help boosting up FDVV yield. FDVV overlaps SPY 41% and its fee is almost 3x SCHD. FDVV beta is 1 and SCHD 0.77 so SCHD is less volatile. FDVV is good as well but i personally rather have separate tech & value ETFs like QQQ/SMH/XLK + SCHD than mixing all of them in FDVV. I ran a quick back test. If you invested $10K in 2019 with option a: SCHD 50% QQQ 50% or option b. FDVV 100%, you will have $28,494 with option A and $22,729 with option B in 2025
Appreciate the long response and reasoning! And listen, it’s a safe bet for sure to balance out a tech heavy port. A point that I was making was that I liked the fund (and held it) back when it was performing well (5yr look you point out)… but it’s important to always be reevaluating. As of late it hasn’t done as well, so pay attn to the next 2025 shuffle to see if you still like the mix, so that we’re not back testing to prove worth… but instead looking at recent performance, forward looking too.
![Blox Fruits Dragon Rework Update [Full Stream]](http://i.ytimg.com/vi/EqDAp8udhm0/mqdefault.jpg)
Schd is the value ETF is doing exactly what is designed to be it buy stocks when they’re undervalued and sells them when they’re overvalued. It has run neck and neck with the S&P 500 for over a decade until AI came out and all the big tech stocks got 100s of percent. This is not sustainable. The market runs in cycles and money will eventually rotate back.
A good counterpoint. And you're right about the rotate back as the market broadens out beyond the Mag 7. IMO some of these picks were just underwhelming. There are other undervalued industries and companies that will definitely benefit from the rotation back. But for me, I didn't want to take another year to wait for the right mix here when I didn't see it happening. Let's see what March 2025 looks like with this one... thanks for the comment!
I hold SCHD as a value based dividend growth ETF and hedge - case in point, yesterday. Tech drops 3%, the S&P drops 1.5%, and FDVV drops 1%, but SCHD gains 1.35%. And long term, SCHD has performed very well. The thing I don't like about FDVV is that the dividend growth rate is not strong, and can be negative. I understand your point though, and to each their own. No investor is the same.
Holding as a hedge = ✅ my hedge is DIVO, also up a lot yesterday!
long term investors should not be making decisions based on 1 year performance.
Correct. Which is why I showed the one year…. and 3yr too. It’ll be 4 soon, IMO
SCHD is not going to perform well in a tech heavy/growth rally - which is what we have been in for the last 3 years. This will change once value stocks stop under performing and catch up with their very long term trends.
It’s possible, yes. Given the significant investments in tech and AI for the next few years it could take awhile to catch up… maybe a decade or more. Makes sense to wait?
I hear ya where you don't like certain stocks and don't like what they removed/passive methodology. But another way of looking at it for me at least is, well, I don't agree with everything they do, but I want more diversification in my dividend stocks with a low expense ratio.
Understandable!
Hi Dream,
Another great video, just a little confused though, what are you suggesting, ALTs like DIVO, VYM? or SPY itself, which is not dividend oriented.
Also, I really want to listen your take on High Yield Dividend ETFs, like SPYI, JEPQ (I know you did a few videos on it), ISPY, XDTE etc.
Hi 👋 yes the comparisons shown could be alt considerations to SCHD. On the others… I’m long JEPQ and did you see my other video on XDTE and QDTE? If not, check it out!
ThanX Dream... Another great video.... I do hold SCHD but I have had some thoughts about their ability going forth..... I do hold several CC ETF's like QQQI, SPYI, GPIX, GPIQ, JEPQ, DIVO and recently added IWMI... Looking into IDVO and QDVO also..... QUESTION... In the later years or retirement years - what percentage amount of your portfolio and the CC ETF's would you hold....??? I am working hard to try and keep things balanced and do not want to overdo it.... Thanks Dream... Keep up the great work....
Good question! As you know I’m not an advisor… but IMO, the cc ETFs are in many respects less risky than holding individual stocks. So in my case I have quite a high percentage. You can do the math on my percentage via my last portfolio reveal if you want. But I’m headed to a place where I have most of my portfolio in cc or regular ETFs.. and the rest in cherry picked growth/quality stocks and cash for opportunities and CSPs.
@ thank you Dream. I have been thinking about that angle with majority of ETF’s, CC ETF’s and some favorite individuals as satellites. Yes, understood on non advice. Only entertainment. I do always enjoy your thoughts and insights on the world of finance. Very much appreciated. Please be well.
SCHD's divestiture of tech, especially AI momentum names will fare well during this incoming sell off.
Interesting! So it’s a short term strategy instead of a long term? I could buy that…
I sold SCHD in November. It felt stagnant to me. Your analysis is spot on & the best explanation for why I sold it. You've also given me something to think about in FDVV. Thanks, Dream 📊📈♥
Glad it was helpful! You’re welcome ☺️
I had a large amount of my net worth in SCHD. The reason I held it was that for a few years, it had a nice div growth run. The problem was that it was inconsistent. I dumped everything into VTI and never looked back. Now I am trying to build up a position in JEPQ, QQQI, and PCN. These among others will fund my old age expenses.
Schd 30% fdvv30% Dgrw 20% stocks 20%
Good video by the way
Thank you 🙏
This is the problem with a rules based index. The comment that you made around 1.15-1.22 referring to context of the market and how these rules ignore the market per se is gold. This is one of the problems with indexing. If you follow the rules blindly on an specially made index, you might get rid of good companies and add struggling companies.
…and, I’ll add, one reason why actively managed and paying a little bit more in expenses isn’t always a bad thing 💎✨🫵 great comment
Schd removed Broadcom and trump just invested 500B in AI. 🤦♂
Not a fan of JEPI? Why, derivatives? Enjoyed the ETF comparisons!
Thanks! On JEPI, I’ve had many videos on why… it’s the underperformance no matter how long you look at it
The analysis feels solid. The title feels click-bait-y. It would be interesting to revisit this at the end of the year to see if your underperformance prediction holds up.
I totally agree with just about everything you said in here. Especially about AVGO. I picked some up when Chuck Carnavale was talking about it on the FASTGraphs channel a few years ago and i cannot imagine selling it anytime soon.
When you buy SCHD you buy the screen. I think a lot of people learned that last year. I think one great use of that ETF is as a genesis for ideas of current out of favor but solid long term buys. Given SCHD's low concentration of holdings in any one stock you can use it as a core holding and if there are any new additions that look particularly tasty, double down on those and hold the stock in addition to the ETF.
I like what you said about "shopping" for undervalued opportunities inside the screen this fund does for you. Makes sense as then you can apply your own expertise and theories. Thanks for the comment!
Just in time Video. I have been reading on X that it's a must have and I have been against it. I'd rather hold $SCHG. Bottomline, you gave me options to move from $IWMI Thank you Thank you Thank you Love you!💌💌💌
Excellent! Everyone should pay close attention to the holdings and the mix, and how that changes annually for some funds. And determine for themselves if they like the risk v. reward dynamic. It's a personal choice!
I was also concerned about SCHD buying Legget & Platt and Hershey, and selling better positions. As Mr. Spock would say: "Most illogical." I consider my SCHD position as fully funded at 1,000 shares, and won't be adding. And will definitely consider Divo and other options. I actually added 2 lone shares of SCHG the other day, to monitor that one -- you're beating the S&P, and still has fairly low risk.
Exactly Duke, and I'm a big fan of SCHG.
LEG is only 0.05% of SCHD. HSY is only 0.84%. Both less than 1% combined. They will not make any difference to SCHD performance.
I was going to start adding qqqm for the tech growth exposure, but here I thought I can buy ETFs and chill like Schd but looks like I can’t
This is exactly the takeaway I was hoping people would have... that there is an annual reconstitution that bears paying attention to with a fund like this, and some others too. You must continue to pay attention and see if the mix and weighting fits your thesis. Else, you commit to the concept and hold for the super long term, and understand the risk v. reward dynamic.
@ I’m definitely diversifying now, I had Schd,Schy I’m going to add Vym and fdvv with qqqm, Schd is my biggest position so now I won’t add anymore to it except the dividend drip
Good, i will buy more.
Another loser in SCHD's holdings that needs go is Cracker barrel in addition to leg, honestly i would prefer them to hold a lot more than 100 holdings. I dont know why more than a couple of these dividend etfs limit themselves to 100 when obviously their quality algorithm is far from perfect . there's plenty more than 100 to hold and still maintain quality. im assuming leg and cracker barrel will certainly get kicked according to the algorithm this march. still tho i have observed same as you as FDVV. that said i dont think i will exit schd just add more to my complimenting positions. another one i hold that has done great is TDIV
Good points! Let's pay close attn at the next shuffle, and see what changes are made.
CBRL is only 0.05% of SCHD. LEG is only 0.05% also. You are worried about 2 stocks that are less than 0.1% of the portfolio. Their algorithm proves for the last 15 years that SCHD can compete well with SPY (well until the AI bubble showed up). Why add more companies that will just dilute the portfolio and will not boost performance? The top 10 stocks consists of 40% of SHCD. Adding 100 more will not make any difference if each additional new stock will be only about 0.05% of the portfolio. We do not need more stocks for diversification. If I want diversification, I buy VTI
I have a personal question. At work were you ever aware that people were not paying attention to what you had to say but instead focused on your voice? 🤣
That's funny... I'm only recently aware that people play clips of my voice to go to sleep, or feel comforted. It's nice to hear ;)
the charts you looked at were set at price return and NOT TOTAL return.....but your channel is named DIVIDEND DREAM???
Take another look... they are Total Return :)
It literally says total return on the chart.
1. Just check top 20 holdings and don't worry about LEG or IIPG. Top 20 is about 71% of SCHD. The remaining 80 stocks will not make a significant difference. Yes, they have VZ in top 20 but that is 1 out of 20. 2. SCHD might not be right for you but it is perfect for me to diversify and hedge my tech heavy stock portfolio. SCHD has 19% financials, 17% health care and 15% consumer staples. If you need tech exposure, do not buy SCHD. Get XLK instead 4. I wonder why you do not show the 5 year performance where SCHD beat VYM and DGRO. You cannot go wrong with any 3 of them. It depends on what you have. If you already have SPY, it is better to get SCHD because SCHD overlaps with SPY about 7% only. SPY has 43% overlap with DGRO and 33% with VYM. You do not diversify much with DGRO/ VYM & SPY. 3. FDVV & SCHD composition is different. FDVV has 27% tech (yes including NVDA, AVGO, MSFT) SCHD 8% The last 3 years, tech outperforms any other industries. FDVV has 10% utilities SCHD almost none. That utilities stocks might help boosting up FDVV yield. FDVV overlaps SPY 41% and its fee is almost 3x SCHD. FDVV beta is 1 and SCHD 0.77 so SCHD is less volatile. FDVV is good as well but i personally rather have separate tech & value ETFs like QQQ/SMH/XLK + SCHD than mixing all of them in FDVV. I ran a quick back test. If you invested $10K in 2019 with option a: SCHD 50% QQQ 50% or option b. FDVV 100%, you will have $28,494 with option A and $22,729 with option B in 2025
Appreciate the long response and reasoning! And listen, it’s a safe bet for sure to balance out a tech heavy port.
A point that I was making was that I liked the fund (and held it) back when it was performing well (5yr look you point out)… but it’s important to always be reevaluating. As of late it hasn’t done as well, so pay attn to the next 2025 shuffle to see if you still like the mix, so that we’re not back testing to prove worth… but instead looking at recent performance, forward looking too.