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Post by Deleted on Nov 29, 2022 20:40:04 GMT
We are retired and living very comfortably off our very sizable portfolio and SS. Our drawdown is approximately 1% and 90% of our investable assets are in tax-sheltered accounts. We are agnostic regarding dividends because shares could also be sold as needed. Looking to move entirely away from actively managed mutual funds in our tax-sheltered accounts and looking at passive ETFs.. Looking at VOO, VIG, and SCHD. Any thoughts regarding how you would mix those three ETFs or whether you would use others would be appreciated. We like to keep it simple, so maybe there is some unnecessary duplication in the three aforementioned ETFs. Thanks in advance for your thoughts.
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Post by steelpony10 on Nov 29, 2022 21:44:50 GMT
@st6 ,
All VOO or VTI on reinvestment.
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Post by Fearchar on Nov 30, 2022 1:23:35 GMT
Using the last 10 years of performance (which of course is no guarantee for the future) the optimum portfolio based on minimum Sharpe ratio would be about: 88% SCHD 12% VOO You may try other time period or constraints: www.portfoliovisualizer.com/optimize-portfolio#analysisResultsAlso, my initial guess of 40% VOO 30% VIG 30% SCHD had very similar results.
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Post by FD1000 on Nov 30, 2022 22:45:21 GMT
Using the last 10 years of performance (which of course is no guarantee for the future) the optimum portfolio based on minimum Sharpe ratio would be about: 88% SCHD 12% VOO You may try other time period or constraints: www.portfoliovisualizer.com/optimize-portfolio#analysisResultsAlso, my initial guess of 40% VOO 30% VIG 30% SCHD had very similar results. Your link doesn't show anything. The past is not a good predictor NOW. Growth has been better than value from 2010 to 2021. Starting 2022, value is better. The easiest is to go with VTI/SCHD 50/50. Why? VOO and VTI have been very close but after many years of VOO dominance, VTI MAY be better because it has a small % in smaller companies. SCHD-has been good during growth period but also value one. VIG? why when you have SCHD which did better for 1-3 years. VIG also has just a bit more yield than VOO at 1.9 vs 1.6, while SCHD has 3.2%
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Post by acksurf on Dec 1, 2022 0:50:32 GMT
I have VIG, SCHD. I got rid of VOO/VTI due to the technology tilt. I'd rather invest in that separately. In place of VOO/VTI I have Vanguard Dividend Growth in tax advantaged and use VIG in taxable.
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Post by Deleted on Dec 1, 2022 1:07:38 GMT
We are retired and living very comfortably off our very sizable portfolio and SS. Our drawdown is approximately 1% and 90% of our investable assets are in tax-sheltered accounts. We are agnostic regarding dividends because shares could also be sold as needed. Looking to move entirely away from actively managed mutual funds in our tax-sheltered accounts and looking at passive ETFs.. Looking at VOO, VIG, and SCHD. Any thoughts regarding how you would mix those three ETFs or whether you would use others would be appreciated. We like to keep it simple, so maybe there is some unnecessary duplication in the three aforementioned ETFs. Thanks in advance for your thoughts. I like VBR and VO for small cap value and mid cap exposure. Maybe 30% - 15 % each. I am not sure VIG and SCHD are so different as I did not look into them closely. They both appear to be quality based dividend etfs - so either or? Maybe 35% of SCHD or VIG and 35% of VOO. VTI ticks the box if you want to include small, mid and large. This is a well diversified portfolio, so I would expect to earn the market return if held long term.
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Post by retiredat48 on Dec 1, 2022 3:52:24 GMT
Have investors considered that VIG is dividend growth fund. As such, if we get into torrid inflation for a long period, I expect the VIG type of companies will have better pricing power to raise prices, thus better in keeping up with inflation in the long run.
R48
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Post by chang on Dec 1, 2022 12:02:15 GMT
I own VIG and SCHD, and consider them almost “sleep easy” funds. Have never sold a share. Coming upon on 10 years or so, so I’ve forgotten the original analysis. My impression was that VIG is more quality/growth oriented, while SCHD is more value/dividend oriented; but I think both include quality and dividend-growth factors. Happy owning both, since one will always lead the other. 😆
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Post by retiredat48 on Dec 1, 2022 17:10:38 GMT
I own VIG and SCHD, and consider them almost “sleep easy” funds. Have never sold a share. Coming upon on 10 years or so, so I’ve forgotten the original analysis. My impression was that VIG is more quality/growth oriented, while SCHD is more value/dividend oriented; but I think both include quality and dividend-growth factors. Happy owning both, since one will always lead the other. 😆 OK, but to get "growth plus a dividend" is the key. This means the companies are profitable NOW, increasing earnings, NOW, can raise prices...NOW etc. ie great inflation hedges. (BTW with international companies, getting a dividend NOW is also key as they can fudge books forever; a dividend means some discipline). A big part of the rise in the stock market the last 60 years is nominal inflation growth. That is, a dollar earned in 1965 bought a lot more than a dollar today. At least I could get an ice cream cone for ten cents! R48
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Post by Deleted on Dec 2, 2022 9:32:40 GMT
I have VIG, SCHD. I got rid of VOO/VTI due to the technology tilt. I'd rather invest in that separately. In place of VOO/VTI I have Vanguard Dividend Growth in tax advantaged and use VIG in taxable. Interesting approach you’ve taken. How do you separately invest in technology and do you foresee your avoidance of VOO /VTI to be permanent?
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Post by Deleted on Dec 2, 2022 10:23:37 GMT
retiredat48 , Do you know the dgr for VIG vs SCHD? I eyeballed the top holdings in marketwatch and didn't see a big divergence, but didn't look for dgrs. Edit - I don't know if the data is accurate on this site - www.digrin.com/stocks/detail/SCHD/SCHD's dgr is 17.42% for the last 3 years (is this right?) vs VIG's of 8.42%.
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Post by Deleted on Dec 2, 2022 11:11:00 GMT
retiredat48 , Do you know the dgr for VIG vs SCHD? I eyeballed the top holdings in marketwatch and didn't see a big divergence, but didn't look for dgrs. Edit - I don't know if the data is accurate on this site - www.digrin.com/stocks/detail/SCHD/SCHD's dgr is 17.42% for the last 3 years (is this right?) vs VIG's of 8.42%. SCHD doesn’t require dividend growth but rather only payment of dividends for ten years. VIG requires dividend growth for the prior ten years.
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Post by acksurf on Dec 2, 2022 13:24:40 GMT
I have VIG, SCHD. I got rid of VOO/VTI due to the technology tilt. I'd rather invest in that separately. In place of VOO/VTI I have Vanguard Dividend Growth in tax advantaged and use VIG in taxable. Interesting approach you’ve taken. How do you separately invest in technology and do you foresee your avoidance of VOO /VTI to be permanent? Yes, I don't see re-investing in VOO/VTI. Previously I've stated that as retirement is on the horizon I am moving towards a more dividend oriented portfolio. For me it's a way to maintain a higher equity percentage than I might otherwise. I also think we may be in a period where the broad indexes may not be the best place to be. Companies with strong cash flows and actually make money is usually a good thing. However, I also do some momentum investing so if tech or some other sector has some momentum I'll consider jumping in. I've used QQQ, Fidelity Select Tech, and Vanguard Growth (VUG) in the past.
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Post by retiredat48 on Dec 2, 2022 14:24:01 GMT
Interesting approach you’ve taken. How do you separately invest in technology and do you foresee your avoidance of VOO /VTI to be permanent? Yes, I don't see re-investing in VOO/VTI. Previously I've stated that as retirement is on the horizon I am moving towards a more dividend oriented portfolio. For me it's a way to maintain a higher equity percentage than I might otherwise. I also think we may be in a period where the broad indexes may not be the best place to be. Companies with strong cash flows and actually make money is usually a good thing. However, I also do some momentum investing so if tech or some other sector has some momentum I'll consider jumping in. I've used QQQ, Fidelity Select Tech, and Vanguard Growth (VUG) in the past. acksurf, and others...why limit to one or the other? I agree with the remark about not excluding "growth"...even though I can envision the next decade of growth stock price rises "not beating" value. Like, I've owned Fidelity Select Technology since fund inception; I'm not giving up on this core holding. I will also own the VOO's and VTI's of the world, as well as VIG. R48
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Post by retiredat48 on Dec 2, 2022 14:26:31 GMT
retiredat48 , Do you know the dgr for VIG vs SCHD? I eyeballed the top holdings in marketwatch and didn't see a big divergence, but didn't look for dgrs. Edit - I don't know if the data is accurate on this site - www.digrin.com/stocks/detail/SCHD/SCHD's dgr is 17.42% for the last 3 years (is this right?) vs VIG's of 8.42%. Save me some time and please spell out what you mean by "dgr"?? Like, dividend growth rate...or something else? R48
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Post by acksurf on Dec 2, 2022 15:37:36 GMT
Yes, I don't see re-investing in VOO/VTI. Previously I've stated that as retirement is on the horizon I am moving towards a more dividend oriented portfolio. For me it's a way to maintain a higher equity percentage than I might otherwise. I also think we may be in a period where the broad indexes may not be the best place to be. Companies with strong cash flows and actually make money is usually a good thing. However, I also do some momentum investing so if tech or some other sector has some momentum I'll consider jumping in. I've used QQQ, Fidelity Select Tech, and Vanguard Growth (VUG) in the past. acksurf , and others...why limit to one or the other? I agree with the remark about not excluding "growth"...even though I can envision the next decade of growth stock price rises "not beating" value. Like, I've owned Fidelity Select Technology since fund inception; I'm not giving up on this core holding. I will also own the VOO's and VTI's of the world, as well as VIG. R48 What do you think VOO delivers that VIG or SCHD or VDIGX doesn't? I see no reason to hold VOO/VTI over these holdings from a core fund perspective. One area I tend to agree with FD is keeping the number of funds to a minimum.
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Post by Deleted on Dec 2, 2022 15:51:39 GMT
retiredat48, Sorry - yes, dividend growth rate. I was surprised to see SCHD's as double VIG on the site I posted. Doesn't seem right. I will look at it later, but was curious what components of VIG would lead to better dividend appreciation. With dividend stocks, usually there is often a tradeoff on yield and growth of the dividend - lower yield, but higher growth rate. I expected VIG's dgr to be much higher than SCHD. I didn't see much of a difference in top holdings (using marketwatch) as to growth vs value companies.
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Post by mozart522 on Dec 2, 2022 15:56:07 GMT
retiredat48 , Do you know the dgr for VIG vs SCHD? I eyeballed the top holdings in marketwatch and didn't see a big divergence, but didn't look for dgrs. Edit - I don't know if the data is accurate on this site - www.digrin.com/stocks/detail/SCHD/SCHD's dgr is 17.42% for the last 3 years (is this right?) vs VIG's of 8.42%. SCHD doesn’t require dividend growth but rather only payment of dividends for ten years. VIG requires dividend growth for the prior ten years. You don't need VIG with SCHD, IMO. Go to PV and put them both in at 100%. Then say yes to display income and no to reinvest dividends. What you will see is that by taking all the income, the TR is almost the same, but the growth of income highly favors SCHD. Now go back and say yes to reinvested dividends. Look at that income growth. SCHD kills VIG in both TR and income. you don't need VIG, at least you haven't needed it. My choices would be 45% SCHD, 35% VOO, and 20% VUG, 14% CAGR for the last 11 years.
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Post by fritzo489 on Dec 2, 2022 16:00:38 GMT
@st6, steelpony10, Fearchar, FD1000, acksurf,@slooow, retiredat48, chang, mozart522, Thanks for all of your replies , enjoying the thread. Have a good day, fritzo489
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Post by bizman on Dec 2, 2022 19:42:20 GMT
retiredat48 , Do you know the dgr for VIG vs SCHD? I eyeballed the top holdings in marketwatch and didn't see a big divergence, but didn't look for dgrs. Edit - I don't know if the data is accurate on this site - www.digrin.com/stocks/detail/SCHD/SCHD's dgr is 17.42% for the last 3 years (is this right?) vs VIG's of 8.42%. The divergence in dividend growth rates is one of the big things that caused me to take note of SCHD a couple of years ago. This is one of the advantages of SCHD's screens for profitability and dividend growth rates, among other things. But I have a great deal in SCHD and am thinking of diversifying into VIG as it has a bit more of a profitable growth profile (as R48 has indicated). Also, though this might sound like apostasy for a dividend growth investor who lionizes Josh Peters, I recognize that reinvestment matters too. For example, a company like Microsoft investing in its business at a high rate of return to grow the business isn't a bad thing, as long as you trust the management.
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Post by retiredat48 on Dec 3, 2022 3:37:08 GMT
mozart522 , acksurf , @slooow , bizman ,...et al. I am time-challenged, but some replies and observations: --I own SCHD and VIG. I am not against anyone owning some of the other combination. And perhaps there are some even "more perfect" funds. --The dividend growth rate anomaly I would have to explore more. But what I see: Schd owns things like Verizon and Valero. For example, I do not see Verizon (a current high yielder) as having much growth in the future,and a real risk of decline in business. Ditto valero and gas usage. VIG does not own these...but owns things that have a definite more positive growth outlook, maybe also share buybacks, earnings growth. The yield less but the overall business earnings higher, and growing. I do not think we should look backwards at returns for VIG versus other funds cited. Rather, what about going forward? I see VIG companies as having great pricing power to raise prices...or other wise benefit from inflation. They will keep up. Such as: VIG owns Mastercard. If inflation is 10% a year, and prices thus double every seven years, this means charge card companies will have their throughput double, even without any card customer growth. Mastercard takes a 0.25% slice of all transactions. Double the amount charged, bottom line earnings double or more, dividends increased adccordingly. A great beat-inflation stock. It is why going forward I expect VIG to do well. It is the "severe inflation hedge" for me. R48
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Post by Deleted on Dec 3, 2022 4:09:00 GMT
mozart522 , acksurf , @slooow , bizman ,...et al. I am time-challenged, but some replies and observations: --I own SCHD and VIG. I am not against anyone owning some of the other combination. And perhaps there are some even "more perfect" funds. --The dividend growth rate anomaly I would have to explore more. But what I see: Schd owns things like Verizon and Valero. For example, I do not see Verizon (a current high yielder) as having much growth in the future,and a real risk of decline in business. Ditto valero and gas usage. VIG does not own these...but owns things that have a definite more positive growth outlook, maybe also share buybacks, earnings growth. The yield less but the overall business earnings higher, and growing. I do not think we should look backwards at returns for VIG versus other funds cited. Rather, what about going forward? I see VIG companies as having great pricing power to raise prices...or other wise benefit from inflation. They will keep up. Such as: VIG owns Mastercard. If inflation is 10% a year, and prices thus double every seven years, this means charge card companies will have their throughput double, even without any card customer growth. Mastercard takes a 0.25% slice of all transactions. Double the amount charged, bottom line earnings double or more, dividends increased adccordingly. A great beat-inflation stock. It is why going forward I expect VIG to do well. It is the "severe inflation hedge" for me. R48 This is a fabulously well stated observation .
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Post by roi2020 on Dec 3, 2022 5:34:12 GMT
Investors may want to consider VIG's in-house actively managed rival - VDIGX¹. VDIGX had a higher CAGR, better worst year, and lower max. drawdown over the trailing 10 yr., 15 yr., and since VIG inception² time periods.
June 2006 - Nov. 2022
¹ Don Kilbride (Wellington Management) has managed the fund since 02/01/2006.
² Inception date: 04/21/2006; earliest available monthly data starts June 2006.
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Post by mozart522 on Dec 3, 2022 13:05:12 GMT
retiredat48, @st6, My response was to the OP's original question which I surmised as a 3-fund portfolio. We know that R48 holds many funds so keeping VIG and SCHD together as part of his 16+ fund portfolio might be helpful. But I maintain that holding VIG and SCHD along with VOO in a 3-fund portfolio is way too much value tilt in a world where tech is still more likely to have higher returns and the OP says he/she is agnostic about dividends. This amounts to 80%+/- large value equities, and 20% growth. You will very likely be leaving a lot of money on the table for very close to the same risk. IMHO
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Post by Deleted on Dec 3, 2022 14:06:11 GMT
I've seriously considered VIG in the past because it doesn't hold any FAANG stocks and it isn't as concentrated in its top holdings as SCHD.
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Post by coptomist on Dec 3, 2022 15:45:01 GMT
I too have been considering some changes involving these ETFs. My current portfolio equities are mostly SCHD/IVV at a 53/47% ratio.
I also know that VDIGX has outperformed VIG, and with lower volatility and a higher sortino ratio for some time. I also have a Roth I could put it in. VIG has a larger percentage of small/mid cap stocks. Maybe that accounts for the previous underperformance, and maybe that will work in it's favor in the coming years. Unknowable I suppose, but maybe worth considering.
My IVV holdings are in a taxable account with tax handcuffs. In my current tax bracket, selling some would give me about a 7% tax hit. That's a big hit, but I'm so irritated with the large overweighting to the giant techs in IVV, that I'm considering selling some to move into either VIG, SCHD, or a tbd ETF, which may or may not outperform enough to recoup the taxes in a few years time. SCHD has done 13% better than IVV/SPY so far this year. I know, reversion to the mean could get in my way on this, your thoughts would be appreciated.
I've also considered just buying the top 20 IVV/SPY stocks in an equal weighting in my Roth where taxes wouldn't matter for re-weighting annually. I don't like the RSP or most equal weighted ETFs, since I do like the more successful top holdings in IVV, just don't want the massive overweighting at the tip top, ugh.
I am really enjoying this thread, thanks to everyone contributing.
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Post by Deleted on Dec 3, 2022 16:58:58 GMT
The OP's original funds include two vanguards. As a FIDO member, unwilling to pay the $75 fees, I have been using SCHD, SPLG and CDC in much the same way. Equal positions of each gives me the exposures I want which are strongest in Health Care, Tech and Financials. I know the ER for CDC is slightly elevated but CDC also reduces beta slightly. Anyway, for no Vanguard, these are my equivalents and they track right on top of VOO, VIG, SCHD.
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Post by sgra on Dec 3, 2022 18:32:42 GMT
No fee at Fido for Vanguard ETFs. $75 is for mutual funds.
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Post by yogibearbull on Dec 3, 2022 19:03:43 GMT
@7thhole, stocks, ETFs, CEFs now trade commission-free at most major brokerages. So, no problem buying Vanguard ETFs at Fido or Schwab, and vice versa.
SCHD is div-blend and is flat YTD (+0.26%).
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Post by ECE Prof on Dec 3, 2022 19:22:20 GMT
There are many ETFs corresponding to mutual funds, and ETFs are tax efficient. You google and find out the ETF equivalents of the mutual funds you want. In fact, Vanguard opened a brokerage account and moved my mutual funds to ETFs without tax consequences on June 4, 2010. They offered and asked me if I wanted to do it. One blogger "Ted Eagle" suggested to me in the old M* forum back in 2000 to use ETFs to avoid CG distributions from mutual funds. I still buy VG ETFs in the FIDO brokerage. I still own the shares VTI bought on 06/04/2010 in my FIDO account, transferred from the Vanguard brokerage last month.
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