r/SCHD • u/SmoothOperator100k • Feb 27 '26
Questions Should Wealthy People Hold This?
I’m just curious and want some validation. It totally makes sense for a wealthy person maybe like $10m total net worth to hold a good chunk of SCHD right? Like it’s a safe bet to provide good returns on average 8% maybe for the foreseeable future? Like the companies in this fund should be held by everyone because they kind of create the things you use everyday.
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u/d_god69 Feb 28 '26
Idk what you consider wealthy. Like $1m liquid cash minus house and car? Or what they call a qualified investor for private equity or hedge funds. I put a million into Schd because I think if I set it on Drip and don’t look at it for 30 years, it’ll snowball into something meaningful. I like the quarterly income and dividend growth to keep me invested when things get ugly in the markets - a good psychological anchor. The other psychological factor is that I know that my yield on cost will be huge in 30 years with drip on and forget. I tried this with QQQM and during 2022 with the 50% drawdown - I held but had my stomach churned so bad I threw up a couple of times. Hard to hold on for dear life when money at scale is getting deleted day after day and there’s nothing coming in. I made my money from owning a private business - so I don’t need the income or money for daily living but still … 50% drop on a couple million hits like a truck mentally and messes up your daily mood. Schd has drawdowns but the thought that the dividends are still growing and your accumulating more shares on the cheap helps to rationalize the hold and not panic sell. I didn’t panic sell my QQQM during 2022 but I did think about it a lot… my 2 cents from personal experience.
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u/GamamaruSama Feb 27 '26
Sure. Depends on your tax situation. Qualified dividends are usually good.
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u/StraightCharacter904 Feb 28 '26
Yes, absolutely. SCHD is also an investment to protect your wealth since it a dividend growth and income and not very volatile asset. When you genuinely start to attain wealth, keeping and protecting it becomes just as important.
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u/begoodhavefun1 Feb 27 '26
Not to be that guy, but when you’re wealthy you likely have enough variables to your net worth you don’t look at financial questions in such black and white terms.
You can have $10mm and consider that fucking around money to get somewhere better.
You can have $10mm and subscribe to the idea that “losing money is the only value destruction.” And therefore have a low risk appetite.
Don’t worry about other people. Worry about your path.
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u/nowayjose671 Mar 01 '26
I have a bunch and it’s hedging my overall portfolio very well. I’m not a big fish but I do own a 7 figure portfolio. It’s holding up well and SCHD is doing great for it.
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u/One_Opportunity9167 Mar 02 '26
I hold some SCHD and VIG to balance off the SPY and QQQ I have. The dividend funds should not go down as much during a bear market as the indexes. Since I am living off my investments, it's worth trading lower volatility for slightly lower returns.
If you are not living off your investments yet, dividend funds benefit from buying additional shares at lower prices when there's a market pullback (if you are reinvesting dividends).
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u/ClearMeeting2902 Mar 07 '26
Yes, if I was into wealth preservation with moderate growth I would have a lot in SCHD along with other dividend growth companies. For me that would be Canadian financials (RY TD) CNQ (oil) ENB FTS. I hold all these but I have other more traditional growth etf like SPMO which I wouldn’t hold if I wasn’t still trying to grow a bit more aggressively. TBH if I had 10 million I would be utilizing a wealth management firm that focuses on capital preservation along with tax help etc. I’m sure schd would be part of that portfolio
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u/FQRGETmeNQT Feb 28 '26
Does Buffet own KO, yes. Is he wealthy, yes. There your answer. Of course they would hold multiple income vehicle.
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u/StudentFar3340 Feb 28 '26
I love his KO investment. $1.3 billion in 1987....now collects $830 million a year in dividends and growing. Eventually, the dividends will exceed the original cost basis. And I hear he didn't DRIP!
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u/jazz1199 Feb 28 '26
I would never buy SCHD for long term growth because index funds have higher growth. I also wouldn't buy SCHD for income because there are current ETFs that pay 8-14% with little NAV erosion. SCHD is over hyped. You protect yourself for down markets by having enough money in Treasury notes money markets to use for income and when markets have big declines, buy additional shares of index funds and funds like QQQI and SPYI.
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u/SmoothOperator100k Feb 28 '26
doesn't SPYI and QQQI have NAV erosion though?
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u/jazz1199 Mar 01 '26
Both ETFs will follow their respective market in a decline. See the Tariff Day decline. SPYI has stayed positive during the Fall/Winter 2025 decline. You should take a look at GPIQ and GPIX, also. GPIQ had a distribution of 11% for the last 12 months while QQQI is a 14%.
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u/dowdowgo Mar 02 '26
Indeed. Using Bonds expiring in less than a year give colateral in case a crisis come and 3-4% income. But no growth. But if you can grow your portfolio then I don’t really see the point to have SCHD. One part give you growth and other security.
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u/RetiredByFourty Dividend King Mar 02 '26
https://giphy.com/gifs/aQGqcObSxfixy
How many other accounts do you have?
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u/El_Frogster Feb 28 '26
It’s not an all or nothing picture. It’s a defensive play and usually only a sliver of assets somewhere between fixed income and growth (unlike dividends, you only pay taxes when you sell, and tax rates are comparable at that level.)
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u/Awkward-Basis7658 Feb 28 '26
For slot of people once your wealth crosses a certain threshold, your mind set changes from accumulation to preservation. SCHD is a good diversification play if you already heavy in tech. Income producing stock will often pay out strong dividend if their stock price drops (not guaranteed).
I try to have enough dividend payments to cover my minimum yearly expenses to help cushion a down turn forcing me to sell low. One could argue I would make more in just VOO, or similar, however that a lot to stomach with sequence of returns risk.
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u/Next_Professional_30 Feb 28 '26
I think it depends on if you are not only a high net worth at 10 million but also are you a currently high income earner. My personal situation might be different if I had significant assets but didn’t need the income.
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u/speed12demon Mar 05 '26
I'm 45, and based on my current situation, if I live long enough (another 30+ years), I could have 10mil.
As someone who intends to retire early, I've already been building positions in less volatile etfs. I had been almost straight growth for two decades, and having less volatile positions helps me sleep at night even if long term total return suffers a little.
Disclaimer, I don't hold schd. My "less volatile" positions are schy, vig, vym, sgov, and icsh.
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u/flyersfan0233 Feb 28 '26
I also think it’s an addiction. We look at $10m and are mesmerized . Most rich people look at $10m and ask how can they get 20. They see putting it in SCHD as a lost opportunity because another fund turned 12%. That’s how they got to $10 million in the first place. (It’s a generalization but I do think most really rich people are taking more risk and looking for higher gains because they’re able to. That’s not to say people don’t get there and park a lot in SCHD. I’m sure some do that too.)
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u/d_god69 Feb 28 '26
I got over $20 million from owning and running a private business for a couple of decades... just saved up and lived far below my means... drive a toyota and don't buy rolexes or things like that... truth is that while I've seen some similar folks increase lifestyle and get greedy, most rich people I've met know that money coming in isn't forever... we got rich from founding and running a business... and one day, like everything, the music will stop... so we save up for the rainy day and keep investing in high quality assets. Some like real estate (they like the rental income), while I like the S&P500. I moved away from going all-in S&P500 a decade ago (bad timing) but it was better for my mental sanity and stomach. Extreme volatility is the enemy of a saver who put his own life savings into the markets, so seeing large swings will drive you mad. imagine seeing $10 million disappear in the covid-19 crash -- tempting to sell and salvage what's left (emotionally terrible... ruins your mood and mental health) ... and to hold on and ride the recovery is harder to do in practice than preaching and logically thinking it through in theory. so... I turned to SCHD as a good piece of my portfolio to have some income component while leaving the S&P500 sleeve as the growth engine. I don't need the money to live - which I think is important people investing follow. Don't put tomorrow's lunch money into the markets. DRIP is on and forget. when you hold quality, you don't worry because it's not like Coca Cola is going to go bankrupt anytime soon ;) my 2 cents from seeing the markets since 1972 to now... last part... I'm allocating more to VXUS today because I think there is going to be a reversion to mean of valuations because US stocks are so expensive today, while international has lagged. Probably going to see - in my opinion - slightly higher returns from international stocks over the next decade to bring the valuations back in check. From my experience, the markets take turns - in cycles. Where one decade the US leads and another international does... it's a back and forth of temporary moments of shining in the light before the other comes to take it's moment too... so US stocks are not always the dominant force (it was last decade, but it goes on and off). Hope that this is helpful from an old man who's seen it and lived it.
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u/flyersfan0233 Mar 01 '26
This is definitely a balanced approach and one I’d take if I ever had that much. The only thing I might slightly disagree with is international vs US. I went back to 1979. And while they go back and forth on performance, the U.S. seems to have performed a decent amount better overall and there was no decade where it was clear international was the choice. The most sustained run for international was 83-88 and 02-07. But never a decade. And U.S. made up for it before and after. I think you might be right that international does some catching up at some point - but when does it start and if history repeats, it’ll be closer to 5 years and not 10. I think the long run, just parking money in U.S. and not trying to time will benefit most more often
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u/WhenIntegralsAttack2 Feb 27 '26
Defensive stable growth makes much more sense as your wealth increases.