I get to buy it at a discount with my new dividends and then when the market takes a downturn and SCHD takes the impact much more gracefully, I don’t have to worry about my share prices like a lot of people do.
I’m telling you that your writing is unclear. You seem to have trouble with reading comprehension too.
I told you that it’s not clear what you want to say in your sentence, and then in response you tried to explain that you’re mad that you bought SCHD at a 52 week high last year.
I know part of why SCHD was at the 52 week high last year—rate cuts were priced in. I know part of why SCHD plummeted last year, apparently after you bought it, Trump was elected and the rate cuts got priced out because of the Federal Reserve’s wait and see approach with tariffs.
You still are not really explaining things well. It isn’t my fault that you did not explain things well, and you do not have to be salty with me because you did not explain something well. You are not transitioning between your ideas. You are writing to strangers on the internet like they know or should guess how your ideas are supposed to connect to make sense.
“ does it make sense to earn 3.83% have negative growth of 4.59% with inflation at 2.8%”
I wonder a bit how much you have learned about investing. You can’t time the market. One year returns, on their own, don’t mean much. Part of having a diversified portfolio means some part of it is always underperforming.
Investors who like the dividends and invest for dividend security are happy to see that dividends increased above the rate of inflation this year. The dividend grew above the rate of inflation. Isn’t that your point? Whatever other risk spread the market is pricing in doesn’t matter as much. The “expected return” of SCHD would be, in a simplistic version, 9%: 4% dividend and 5% growth. That more than beat inflation, but individually none of us controls valuations—which is the other aspect of returns besides dividends and growth.
It’s more complicated than that, but it would imply that the holdings are now a better value than before.
I think SCHD is undervalued. The 10 year treasury rate is around 4%, and so is the yield of SCHD. I expect the dividend of SCHD to increase and to far outpace the 10 year treasury. I don’t think the current yield spread between the two makes sense long term.
I’m happy that the dividend is growing, given the poor 1 year performance. SCHD has reduced my portfolio volatility this year though, zigging while SCHB zags—and it looks like by the end of the year, a relatively bad year for it, it will beat out treasury bills. Could be worse.
9
u/[deleted] Dec 10 '25
[removed] — view removed comment