SCHD: Solid Dividend ETF with Limitations
"If you own SCHD, you're not wrong. But what if I told you that SCHD may not be the best dividend focused ETF on the market right now? SCHD is still a very high quality dividend ETF, but it's important to know how it's formed, why it's underperforming, and how interest rates can affect performance and sector performance of that particular ETF."
The speaker acknowledges SCHD as a quality dividend ETF while highlighting its structural limitations and underperformance compared to other market segments, suggesting that its setup may not suit every investor's needs.
Buy SCHD for Long-Term Income and Stability
"SCHD, the Schwab Dividend ETF. Now, SCHD has not been the hottest performer this year. So, yes, SCHD is lagging the S&P 500. There is no hiding that. SCHD, in my opinion, is built for long-term income and stability, not headlines and quick spikes. I don't jump in and out of investments. I don't trade SCHD because it lags this quarter. I don't panic sell when it doesn't outshine the S&P. That's not investing."
The speaker endorses SCHD as a steady, long-term investment for income and capital preservation. Emphasizing a disciplined, dollar-cost averaging approach, the commentary highlights that short-term underperformance should not deter investors looking for stability over decades.
Continue Holding SCHD for Long-Term Stability
"But even when SCHD isn't outperforming, I'm still earning a great solid dividend, one that continues to grow. And that's why I think we need to start entering SCHD. SCHD is a long-term position for me. And based on all that, I continue to believe we're going to have a shaky November, and I think we could have a very shaky 2026. So, for me, I'm going to continue to hold SCHD in my portfolio."
The speaker explains that despite SCHD's relative underperformance compared to tech-heavy indices, its diversification and strong, growing dividend make it a defensive, long-term holding. He emphasizes SCHD's role in stabilizing a portfolio during economic rotations and expresses high conviction in keeping it as a top position.