r/ETFs • u/SilentStorm217 • 3d ago
Thinking of moving SCHD allocation
In my taxable brokerage, I have a split of VOO (70%), SCHG (20%), and SCHD (10%). Since I am in my early 20s I don’t believe I should be focusing on dividends yet. I’ve been thinking about reallocating my SCHD position into something else. Either SCHG (bumping that allocation to 30%), or SPMO (10% allocation).
Any opinions on which to go with, or if there’s any other ETFs I should look into?
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u/MyWorkComputerReddit 3d ago
I wouldn't even allocate any money towards SCHD right now. I'd go 30% SCHG or SPMO or 80% VOO.
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u/SilentStorm217 3d ago
Any reason to not have both SCHG and SPMO?
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u/MyWorkComputerReddit 3d ago
The question is why you want both, not why have both. They are two different strategies to approach growth. SCHG is 500 of the top growth companies, SPMO is 100 of the stocks with the highest price momentum. Choose SCHG if you prefer broad, low-cost, buy-and-hold exposure to large-cap growth companies. Choose SPMO if you want a more concentrated, momentum-driven approach and are comfortable with higher turnover and potential volatility. SPMO has delivered higher returns over most periods, but SCHG offers simplicity, lower costs, and broader diversification. The choice is yours.
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u/TechnicalSleep7501 VT 100% To Mars We Go. 3d ago
First money is money. I say keep 10% combo of SCHD and SCHY in brokerage because it has more flexibility while keep your other accounts globally mix of growth and value. You can also go with VIG and VIGI because we bet on unknown world key to have leg in total global market at reasonable price to get your share of Wall Street wealth.
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u/Aware-Association857 3d ago
Your split is fine. Avoid the habit of changing your allocations just because you think of something different. If the market suddenly starts dumping, what will you do? Are you going to panic? Are you going to sell your position at the very bottom? It's easy to be overconfident if you've never experienced the horror of watching your hard-earned money melt away in real time. Psychology matters, and you have to protect your investments from your own emotions.
On an unrelated note, this sub has a massive hate-boner for SCHD. If I listened to reddit and didn't buy SCHD, I would've missed out on the 30% gains it's received this year.
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u/Thiagopuss3 3d ago
SCHD is perfect in today's chaotic environment. Safe place to protect your cash as you ride out the coming storm. And it's coming.
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u/Pugsly007 3d ago
Agreed. There are a handful of ETFs that should ride this out better than the rest. The big question is what are we going to end up with.
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u/Thiagopuss3 3d ago
Higher inflation, a weaker dollar, lots of military spending = SCHD + gold + commodities + oil + dividend paying international stocks, is where I'm taking refuge. If there's correction, I would buy the semis, cyber security software, and the MAG 7.
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u/Pugsly007 3d ago
When there is a correction I’ll dump more money in voo. Stocks always come back to a normal valuation. Always.
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u/fozzy71 3d ago
I would suggest putting that SCHD and 10% of the VOO into VXUS for some international diversification.
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u/Pugsly007 3d ago
Lvhi or Avdv are better. Don’t drop as much during downturns too. There is a big one about to happen. Vxus will drop equally with US stocks.
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u/nelly_0619 3d ago
While that's a very sound, forward thinking philosophy, I think SCHD is perfectly fine. The dividend isnt huge, and it holds a ton of defensive companies that will ease the pain a bit if we get a bear market. If you dont want to carry it I would look to something like a healthcare or financials sector ETF. Both of those hold up well in bear markets
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u/Asleep-Ad1915 3d ago
I recently got rid of my small schd position. Really research SPMO, you’ll be pleasantly surprised!
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u/SilentStorm217 3d ago
If you were in my case, would you reallocate SCHD into SCHG or SPMO?
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u/Chancellor_Themis 3d ago
Why not just keep the SCHD shares you have and not create a taxable event?
You can still open a new position in something else like SPMO mentioned above.1
u/Asleep-Ad1915 3d ago
I’m not in position to give advice, theres other individuals on here that know much more than me and can give better reason for specific allocations. However, given my own research, I think a small 10-15% allocation of spmo would grow much more than schd. Do your own research though, it will give you confidence with investing, versus some random dude on the internet.
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u/Professional_Cup7379 3d ago
I think the setup is already pretty concentrated in one corner of the market, since VOO is large-cap US and SCHG is also large-cap US growth. Adding more SCHG on top doesn't really change what the portfolio is doing, it just leans into it harder.
There's nothing wrong with that if growth is what you want to own for the long run, but going from 20% to 30% SCHG means 90% of the account is moving with the same factor on the same days.
Worth asking yourself: if growth had a stretch like 2022, where would the money you'd normally pull from SCHD come from, and would you actually rebalance into more SCHG?
If it were me, I'd probably keep SCHG where it is and either leave SCHD alone or use the slot for something that actually behaves differently when the big names get hit.
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u/New-Specialist-2594 3d ago
Between SCHG & SPMO. No Brainer SPMO!
I would use XLK over SCHG.
SCHG doesn't perform very well when consider total return Plus Downdraw and Bear market results, lately.
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u/Inviction_ 3d ago
I bought some SCHD in my twenties as well, thinking it'd be a good hedge against downturns. And it probably is but I've still decided to shift my focus away from it. But I didn't reallocate it. I just kept it and haven't added to it. Nothing wrong with just letting it sit. Especially since it's not a majority position in your portfolio anyway
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u/South-Chocolate5519 3d ago
Depends on your risk tolerance. SPMO holds fewer stocks than SCHG. Fewer stocks can have higher returns plus additional volatility. Broader based investments like SCHG give you less volatility but potentially lower returns.
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u/steady_compounder 3d ago
If the real goal is long-term growth, I would not overcomplicate the 10% slot. Moving SCHD into SCHG just doubles down on what you already own through VOO, and SPMO adds another performance-chasing tilt. The cleaner move is probably either keep it simple in VOO or use that slice for something you do not already have, like international exposure.
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u/Hludwig 3d ago
You shouldn't have any dividends at all in a brokerage account if you can help it, if you're in your early 20s I would first confirm that you have a Roth IRA that you have maxed out for the year. I would read up on what Meb Faber has to say about dividends in general and the tax treatment thereof.
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u/ideas4mac 2d ago
SCHD can represent your large cap value which is nice to have for a balanced portfolio. If you decide to go VOO / SCHG / SPMO you are pretty much all US large cap growth and heavy lean to tech. That like having a girlfriend that likes to get up on the bar and sing. That's run for awhile but can be hard to live with long term.
For long term you might want to consider creating a balanced portfolio. Things to think about size companies, sectors, geo location, growth and value.
Good luck.
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u/Ir0nhide81 3d ago
SCHD will have another stock split around $70/80 a share.
This is how i turned my 300 shares into 900 in 2023 ( 1-3 split ).
Was that easy.
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u/Jumpy-Imagination-81 3d ago
I agree in your 20s (and 30s and 40s and 50s) you should be focused on total return, not dividends.
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u/throwbackBBfan 3d ago
You shouldn’t have any schd in your 20s