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Post by FD1000 on Nov 20, 2022 13:27:04 GMT
I have been discussing SCHD for years. It's nice to see an (article) with analysis of it.
* SCHD is a unique blend of dividend growth, quality factors, and yield, making it an ideal one-stop-shop option for dividend growth investors of all life stages.
* There are many dividend ETFs, each with their own individual stock-picking methodologies. I explain why I think SCHD is the best.
* For dividend growth investors, you have to take yield-on-cost and projected future yield-on-cost into consideration when choosing investments.
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In the last 5 years: SPY and SCHD were close until earlier in 2022, but, value+higher Div took over and SCHD is ahead of SPY in 2022.Attachments:
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Post by coptomist on Nov 20, 2022 14:46:47 GMT
Thanks for the SCHD article FD! Unfortunately I appear to have reached my free reading limit on SA. If anyone knows of another way to view the article, please provide a link if you can. Thanks in advance!
I've held SCHD since 2020. It is the larger part of my two ETF U.S. core at this time (SCHD/IVV at ~60/40).
With this mix I get a dividend that supports my withdrawal needs and keeps my holdings from being overwhelmed by the cap weighting structure of IVV/SPY. Via Morningstar X-Ray, my top ten stocks are way, way more equally weighted than the extremely top heavy cap weighted S&P 500.
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Post by ECE Prof on Nov 20, 2022 15:03:50 GMT
I started investing in HDV recently, and made some cash. I like HDV and SCHD (both) but not SPYD. SPYD is fine, but SCHD and HDV seem to be better. What do I know? I only invested in these less than a year. FD should know better.
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Post by mozart522 on Nov 20, 2022 15:53:14 GMT
HDV is very overweight in Energy and HC, so the good news may be gone soon, as people pile back out. Over the life of SCHD, its TR is 100% more than HDV. I might suggest you look at COWZ which is also overweight in those sectors, but has over 200% better return over the last 5 years than HDV and even better return than SCHD. Being a mid-cap value fund it has little overlap.
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Post by yogibearbull on Nov 20, 2022 16:19:27 GMT
I also like div-blend SCHD. Vanguard is big, so it could afford to have current-div VYM and div-growth VIG. But Schwab wanted only one, so it went with div-blend. Also, its criteria aren't extreme, not too high div, nor decades of div or div-gr histories (e.g. NOBL). So, it was early to pick up the techs when more of them started paying div in the last decade or so. StockCharts shows default 1-yr, but change timeframe to see how SCHD has done over time. SCHD VYM VIG NOBL |
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Post by ECE Prof on Nov 20, 2022 16:19:29 GMT
HDV is very overweight in Energy and HC, so the good news may be gone soon, as people pile back out. Over the life of SCHD, its TR is 100% more than HDV. I might suggest you look at COWZ which is also overweight in those sectors, but has over 200% better return over the last 5 years than HDV and even better return than SCHD. Being a mid-cap value fund it has little overlap. Thanks. There is another one, DIVB. I came across DIVB, when I was reading an article on COWZ. Of course, I was a Vanguard guy until last week. So, I know about VIG and VYM for a long time. I had VIG for a long time until 2020 and moved cash from VIG to QQQ and VGT. |
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Post by nobhead on Nov 20, 2022 17:02:55 GMT
Thanks for the SCHD article FD! Unfortunately I appear to have reached my free reading limit on SA. If anyone knows of another way to view the article, please provide a link if you can. Thanks in advance!
Copy the link then open your browser in private (incognito) window. It works for me in Firefox and Chrome.
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Post by mozart522 on Nov 20, 2022 17:06:51 GMT
ECE Prof, DIVB is not the same as COWZ. It is a very large dividend fund much like SCHD but even larger. COWZ targets free cash flow more than dividends. Free cash flow means very little debt which helps when rates are rising. I believe it would pair better with SCHD.
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Post by coptomist on Nov 20, 2022 17:20:56 GMT
Thanks Nobhead!
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Post by ECE Prof on Nov 20, 2022 17:30:48 GMT
Thanks for the SCHD article FD! Unfortunately I appear to have reached my free reading limit on SA. If anyone knows of another way to view the article, please provide a link if you can. Thanks in advance!
Copy the link then open your browser in private (incognito) window. It works for me in Firefox and Chrome.
I use only FF because the other two leak the passwords. I have been in trouble several times with Chrome and Edge. If you use FF, add this “add on”
Sometimes, you have to click “Proceed” because FF does not easily switch to another website in my settings. I have this to block unknown but bad websites. I have full-blown AVG protection. Yet, I am careful. Here is one: Walmart website is so bad with FF and consumes a big memory content. It locks my computer. I use Edge for this one because I have to order my medicines there.
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Post by coptomist on Nov 20, 2022 17:41:26 GMT
Thanks ECE Prof!
I was trying it on Chrome with no luck, but I switched over to Safari and it worked for me, go figure, lol! I appreciate your and nobhead's suggestions!
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Post by FD1000 on Nov 20, 2022 22:59:50 GMT
HDV is very overweight in Energy and HC, so the good news may be gone soon, as people pile back out. Over the life of SCHD, its TR is 100% more than HDV. I might suggest you look at COWZ which is also overweight in those sectors, but has over 200% better return over the last 5 years than HDV and even better return than SCHD. Being a mid-cap value fund it has little overlap. I used screener for ETF at Fidelity + Schwab and found that COWZ was the best performing fund when you look at 1-3-5 years. Excellent !!! But, Since the beginning of COWZ, about 01/2017, to the end of 2020, 4 years, COWZ was behind SCHD,QQQ,SPY. Since 01-01-2021, COWZ took the lead. Edit/add: for 1-3 months + YTD, HDV still leads COWZ + HDV has lower volatility. SCHD is more of a generic find, while COWZ,HDV more specialized/concentrated funds. Read an analysis about COWZ below. seekingalpha.com/article/4479155-cowz-excellent-value-strategy-but-elevated-turnover-is-a-drag?internal_promotion=true&utm_campaign=15437273171&utm_medium=cpc&utm_source=google&utm_term=141557039736%5Edsa-1485125208378%5E%5E621220457640%5E%5E%5EgAttachments:
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Post by mozart522 on Nov 21, 2022 13:47:48 GMT
FD1000, Yup. I was just comparing HDV with COWZ. Except for this year, COWZ crushed HDV. This is for those who are holding a portfolio, more than timers.
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Post by bobfl on Nov 21, 2022 13:56:34 GMT
Very informative post. Educational. Thanks! Since I buy credit only, my question will be from a rookie on this type of investment. I will simplify my question so I can understand the answer. Let's say that you need $60,000 a year to live on and these only generate $35,000 in dividends, do you sell a portion each year to make up the difference? Since retirement almost 20 years ago I have only lived on the income produced by the "base". I think my relatives must sell off some on the base each year to make up for a shortfall, which then reduces further income. Wish I could discuss how they do it, but we don't talk money, per my wife's instructions. :-)
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Post by mozart522 on Nov 21, 2022 16:35:54 GMT
Very informative post. Educational. Thanks! Since I buy credit only, my question will be from a rookie on this type of investment. I will simplify my question so I can understand the answer. Let's say that you need $60,000 a year to live on and these only generate $35,000 in dividends, do you sell a portion each year to make up the difference? Since retirement almost 20 years ago I have only lived on the income produced by the "base". I think my relatives must sell off some on the base each year to make up for a shortfall, which then reduces further income. Wish I could discuss how they do it, but we don't talk money, per my wife's instructions. :-) It is very dependant on each situation. Many could fill in the gap with SS or a pension, or rental income, or even an annuity. Those that can't would probably need to sell. In order to get 35K one would need over 1M working and all in these two funds. Asking for 60K is about 6% per year which is not considered safe. In any event, I would not own them to harvest the income but to reinvest and harvest the total return. I would then get my living expenses from selling bonds and equities depending on which was up. I would sell to rebalance first, and if still needed more, sell which ever was up the most the year before. |
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Post by bobfl on Nov 21, 2022 17:21:57 GMT
Very informative post. Educational. Thanks! Since I buy credit only, my question will be from a rookie on this type of investment. I will simplify my question so I can understand the answer. Let's say that you need $60,000 a year to live on and these only generate $35,000 in dividends, do you sell a portion each year to make up the difference? Since retirement almost 20 years ago I have only lived on the income produced by the "base". I think my relatives must sell off some on the base each year to make up for a shortfall, which then reduces further income. Wish I could discuss how they do it, but we don't talk money, per my wife's instructions. :-) It is very dependant on each situation. Many could fill in the gap with SS or a pension, or rental income, or even an annuity. Those that can't would probably need to sell. In order to get 35K one would need over 1M working and all in these two funds. Asking for 60K is about 6% per year which is not considered safe. In any event, I would not own them to harvest the income but to reinvest and harvest the total return. I would then get my living expenses from selling bonds and equities depending on which was up. I would sell to rebalance first, and if still needed more, sell which ever was up the most the year before. explanation! Thanks. You said, "Asking for 60K is about 6% per year which is not considered safe.". I deal only with investment grade debt and I am very picky in investment grade, so I feel what I own is very safe (unless JPM, BAC, Schwab, etc. go bankrupt). I don't care about their day to day earnings or stock price, just their credit rating. Based on the portfolio value as of Jan 01 2022, I am receiving 6.17% income on that base value, plus cap gains which I do not count. When I retired we used 80+% of our income to pay expenses (including very expensive insurances). Now with the compounding of the left over income and SS we now send about 33% of our income annually. The remainder each year adds to the base. I retired at 55 without a pension, and frankly did not have super paying jobs overall. What I do is not special; I just focus on very high quality debt with the intention of never touching the assets that produce the income. Just a different approach. |
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Post by Deleted on Nov 21, 2022 17:36:01 GMT
It is very dependant on each situation. Many could fill in the gap with SS or a pension, or rental income, or even an annuity. Those that can't would probably need to sell. In order to get 35K one would need over 1M working and all in these two funds. Asking for 60K is about 6% per year which is not considered safe. In any event, I would not own them to harvest the income but to reinvest and harvest the total return. I would then get my living expenses from selling bonds and equities depending on which was up. I would sell to rebalance first, and if still needed more, sell which ever was up the most the year before. explanation! Thanks. You said, "Asking for 60K is about 6% per year which is not considered safe.". I deal only with investment grade debt and I am very picky in investment grade, so I feel what I own is very safe (unless JPM, BAC, Schwab, etc. go bankrupt). I don't care about their day to day earnings or stock price, just their credit rating. Based on the portfolio value as of Jan 01 2022, I am receiving 6.17% income on that base value, plus cap gains which I do not count. When I retired we used 80+% of our income to pay expenses (including very expensive insurances). Now with the compounding of the left over income and SS we now send about 33% of our income annually. The remainder each year adds to the base. I retired at 55 without a pension, and frankly did not have super paying jobs overall. What I do is not special; I just focus on very high quality debt with the intention of never touching the assets that produce the income. Just a different approach. , do you have some posts explaining your investing approach? If so, could you put the links here? Sounds interesting to me. Thank you! |
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Post by bobfl on Nov 21, 2022 17:48:02 GMT
Excellent explanation! Thanks. , do you have some posts explaining your investing approach? If so, could you put the links here? Sounds interesting to me. Thank you! Sara, Can we message via this board? I can write up an explanation and send it to you, just to review. I am extremely conservative in investing, however. So be aware. I never want to tell anyone how to invest. My friend (34 years old) suddenly died in 2007. I helped his wife invest. Then 2008 hit, she did not understand market cycles and panicked. She blamed 2008 on me. From that point I never suggested investment strategies to anyone again. |
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Post by Deleted on Nov 21, 2022 18:14:49 GMT
Of course we can! I am a big believer in holding only one's self accountable for investing decisions. One of the reasons I believe to each his own. Interested in what you look for buying high quality debt and any good overviews on such purchases you recommend. If you prefer pm, I am fine with that. Thanks!
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Post by anitya on Nov 21, 2022 19:19:29 GMT
bobfl , do you have some posts explaining your investing approach? If so, could you put the links here? Sounds interesting to me. Thank you! Sara, Can we message via this board? I can write up an explanation and send it to you, just to review. I am extremely conservative in investing, however. So be aware. I never want to tell anyone how to invest. My friend (34 years old) suddenly died in 2007. I helped his wife invest. Then 2008 hit, she did not understand market cycles and panicked. She blamed 2008 on me. From that point I never suggested investment strategies to anyone again. , Not trying to change your mind. I too have been burned by helping friends and family, especially when they seek help. It is human nature to bifurcate burdens from benefits - all good things are a result of one’s brilliance and actions and all negative things are a result of others’ actions, which includes speech. In this bifurcation, people do not even spare God, and so best not to take it personally. Telling forum members what you do is not the same as giving advice. So, feel free to share what you do or what you are investing in. I would not worry about getting trolled, which hopefully stays sporadic and immediately clamped down. |
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Post by bobfl on Nov 21, 2022 20:44:28 GMT
bobfl , Not trying to change your mind. I too have been burned by helping friends and family, especially when they seek help. It is human nature to bifurcate burdens from benefits - all good things are a result of one’s brilliance and actions and all negative things are a result of others’ actions, which includes speech. In this bifurcation, people do not even spare God, and so best not to take it personally. Telling forum members what you do is not the same as giving advice. So, feel free to share what you do or what you are investing in. I would not worry about getting trolled, which hopefully stays sporadic and immediately clamped down. Thanks Anitya. I now prefer to share how to do research. An investor can look at the facts and make their best judgement. What I do is rather simple so I can share that. |
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Post by mozart522 on Nov 21, 2022 20:55:20 GMT
It is very dependant on each situation. Many could fill in the gap with SS or a pension, or rental income, or even an annuity. Those that can't would probably need to sell. In order to get 35K one would need over 1M working and all in these two funds. Asking for 60K is about 6% per year which is not considered safe. In any event, I would not own them to harvest the income but to reinvest and harvest the total return. I would then get my living expenses from selling bonds and equities depending on which was up. I would sell to rebalance first, and if still needed more, sell which ever was up the most the year before. explanation! Thanks. You said, "Asking for 60K is about 6% per year which is not considered safe.". I deal only with investment grade debt and I am very picky in investment grade, so I feel what I own is very safe (unless JPM, BAC, Schwab, etc. go bankrupt). I don't care about their day to day earnings or stock price, just their credit rating. Based on the portfolio value as of Jan 01 2022, I am receiving 6.17% income on that base value, plus cap gains which I do not count. When I retired we used 80+% of our income to pay expenses (including very expensive insurances). Now with the compounding of the left over income and SS we now send about 33% of our income annually. The remainder each year adds to the base. I retired at 55 without a pension, and frankly did not have super paying jobs overall. What I do is not special; I just focus on very high quality debt with the intention of never touching the assets that produce the income. Just a different approach. I'm guessing that the 6.17% on base value is what we would call personal yield based on original costs, not current yield of the bonds themselves. Is this correct? |
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Post by bobfl on Nov 21, 2022 20:55:42 GMT
Of course we can! I am a big believer in holding only one's self accountable for investing decisions. One of the reasons I believe to each his own. Interested in what you look for buying high quality debt and any good overviews on such purchases you recommend. If you prefer pm, I am fine with that. Thanks! Sara, Will post how I research in this forum. Probably tomorrow because I am working on a project now. Thanks, Bob |
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Post by bobfl on Nov 21, 2022 21:24:26 GMT
I'm guessing that the 6.17% on base value is what we would call personal yield based on original costs, not current yield of the bonds themselves. Is this correct? I maintain a lot of spreadsheet calculations. One calculation is the yield of all dividends combined against the starting annual portfolio value (6.17%). It also recalculates based on the current real time portfolio value. |
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Post by FD1000 on Nov 21, 2022 22:21:32 GMT
Yield explained ( here). Basically, "A mutual fund's yield refers to the income returned to its investors through interest and dividends generated by the fund's investments." It's difficult to get 6% annually, unless you own CEFs or MLP or other unique security, maybe preferred. I invest mostly in bond OEFs, most with higher yield, I never got 6+%. PIMIX is its glory had 5.5%, maybe 6%, but not IG rating. See attachment 1 for several months Only in 2022 we finally see, higher rates, but in 01/2022 it was much lower, see attachment 2. Preferred: I would not call them IG, if they have the majority in BBB, but almost none in A,AA,AAA. Attachments:
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Post by bobfl on Nov 22, 2022 0:06:01 GMT
Yield explained ( here). Basically, "A mutual fund's yield refers to the income returned to its investors through interest and dividends generated by the fund's investments." It's difficult to get 6% annually, unless you own CEFs or MLP or other unique security, maybe preferred. I invest mostly in bond OEFs, most with higher yield, I never got 6+%. PIMIX is its glory had 5.5%, maybe 6%, but not IG rating. See attachment 1 for several months Only in 2022 we finally see, higher rates, but in 01/2022 it was much lower, see attachment 2. Preferred: I would not call them IG, if they have the majority in BBB, but almost none in A,AA,AAA. Please go to S&P, Moody's, and Fitch and look up IG. You don't have to call them IG but the rest of the world does. :-) Also when I went back into the market when it dropped, I bought only IG, quality preferreds with current yields of over 6%. That was my cut off. Plus they were ALL "tax qualified". Of course, the initial issue yield was way less than that. For example, I got some IG written at 4% that dropped so low they were yielding over 6%. But prices are up and they are yielding mid-5s now. My spreadsheets update each preferred stock yield, and a composite yield, in real time. Never know, prices can drop again if the Fed shocks us. |
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Post by archer on Nov 22, 2022 1:02:40 GMT
My core (slow to trade holdings) are FMSDX, SCHD and the smallest of the 3 is JEPI. Jepi has done pretty well this year and it's PF is similar to SCHD. JEPI pays a high dividend which is why I keep a smaller amount of it. I am not confident it will be able to grow its div AND keep it's price up. In it's short life so far it has done well though.
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Post by FD1000 on Nov 22, 2022 5:17:55 GMT
Yield explained ( here). Basically, "A mutual fund's yield refers to the income returned to its investors through interest and dividends generated by the fund's investments." It's difficult to get 6% annually, unless you own CEFs or MLP or other unique security, maybe preferred. I invest mostly in bond OEFs, most with higher yield, I never got 6+%. PIMIX is its glory had 5.5%, maybe 6%, but not IG rating. See attachment 1 for several months Only in 2022 we finally see, higher rates, but in 01/2022 it was much lower, see attachment 2. Preferred: I would not call them IG, if they have the majority in BBB, but almost none in A,AA,AAA. Please go to S&P, Moody's, and Fitch and look up IG. You don't have to call them IG but the rest of the world does. :-) Also when I went back into the market when it dropped, I bought only IG, quality preferreds with current yields of over 6%. That was my cut off. Plus they were ALL "tax qualified". Of course, the initial issue yield was way less than that. For example, I got some IG written at 4% that dropped so low they were yielding over 6%. But prices are up and they are yielding mid-5s now. My spreadsheets update each preferred stock yield, and a composite yield, in real time. Never know, prices can drop again if the Fed shocks us. Since you didn't mention tickers, I just looked at PFF+PGX. Technically, -BBB rating....but When I looked at Q1/2020, both lost 34% ( chart). That isn't conservative. Anyway, this thread is about stocks div, especially ETF. Attachments:
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Post by shridog on Nov 22, 2022 14:34:09 GMT
bobfl Many of us here invest for income and/or our spouse has zero interest in the markets so we set up portfolios to provide income without a lot of stress on the spouse after we are gone. I myself have invested in preferreds in the last couple of months especially in Mortgage Reit area where volatility presented 10% plus current yields with +25% cap gain down the road. I believe an old M* poster (Lord Xot) has been doing the same thing, but with BBB rated companies only. Really interested in how you do your style. Of course only I am responsible for my portfolio.
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Post by FD1000 on Mar 18, 2023 0:02:14 GMT
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