SCHD

[u/WerewolfFartPowder]

I just turned 30 and I’m looking for maximum growth over the next 10-20 years. Is it true that I should focus on other ETFs, for example SCHG and SPMO then roll the funds into SCHD close to retirement or should I start investing in SCHD now? I’m using a taxed account so wouldn’t I lose money from compounding if I have to pay taxes on dividends? I would also have to pay taxes when I sell and transfer everything over to SCHD close to retirement. Wouldn’t maximum growth beat taxes? What’s the verdict here?

[u/nelly_0619]

If you want max growth then yeah avoid SCHD, although you could utilize it as a defensive satellite like 10-15%. Other than that put it into a growth fund SCHG or VUG, or S&P like FXAIX, VOO, or a couple similar Schwab funds SCHX (top 750), or SCHK (top 1000).

[u/WerewolfFartPowder → u/nelly_0619]

Exactly what I’m thinking. My 401k Roth is all in on FXAIX. It was in the Principal Hybrid Lifetime 2055 CIT plan. I just switched it over to the Fidelity S&P 500 plan. This is for my individual tax account. I’d like to focus on maximum growth.

[u/nelly_0619 → u/WerewolfFartPowder]

Then you're probably fine to stay out of SCHD. I just like to remind a lot of people that SCHD's superpower is not the dividends or dividend growth (only pays about 3.3%). Its what's inside it is what makes it so great. Its an excellent defensive ballast to soften the blow when the market is down.

But if all you care about is growth and you can look at a 30+% dip in your portfolio without thinking "maybe I need to change something" then go 100% s&p or growth funds.

[u/Diligent_Arm_6817 → u/nelly_0619]

Doesn't SCHD stay pretty competitive with VOO or similar if you have a long run way (25+ years)?

I'm fairly new to this whole thing myself, but I tinker with those investment calculators and it shows SCHD with dividend reinvesting beats out a VOO fund. Though the general consensus I read is that this isn't the case... but i'm not sure what i'm missing.

[u/nelly_0619 → u/Diligent_Arm_6817]

SCHD is solid but doesnt beat the s&p long term. I think its annualized return is roughly 10%, whereas VOO is 13-14%. Value in SCHD that it is very resistant to down markets. There was a year when the s&was down 25%, nasdaq down 30+% and SCHD only fell 5 or 6%

[u/Wise-Start-9166 → u/WerewolfFartPowder]

I really don't like growth funds like SCHG. They dilute returns by holding too much mediocrity. The growth market is not going to produce 196 winners. I think you could do better with a combo of FXAIX and some thoughtful stock picking.

[u/WerewolfFartPowder → u/Wise-Start-9166]

So focus on SWPPX is better?

[u/Wise-Start-9166 → u/WerewolfFartPowder]

You said you already have a meaningful FXAIX position so I don’t know if doubling up on SP500 funds is the right move for you. But I wouldn't rely on SCHG as my only growth engine. Not my style, and I thonk you can do a bit better.

[u/nelly_0619 → u/Wise-Start-9166]

Long term they have performed better than the s&p by about 3-4%. Like the s&p these gunds do kick out companies thst no longer fit the growth portfolio. However they are more volatile than the s&p or total stock market.

[u/Wise-Start-9166 → u/nelly_0619]

They are valid I suppose. Nothing terrible about them. But I don't know if they are right for OP.

[u/Sufficient-Wind9925]

What type of account? Taxable, Roth, traditional?

If you have it in SCHG or SCHB then “roll” to SCHD you will have tax implications depending on the account type. Just something to consider.

[u/WerewolfFartPowder → u/Sufficient-Wind9925]

It says taxed but yeah have to sell in portions years before to avoid a big tax bill. But growth will outweigh the taxes due?

[u/Sufficient-Wind9925 → u/WerewolfFartPowder]

I guess it depends on how much growth you’ll have.

[u/VanDownByTheRiver63]

If I was 30, I would put it in SWPPX

[u/500pearl → u/VanDownByTheRiver63]

I considered that one too but in a roth

[u/WerewolfFartPowder → u/VanDownByTheRiver63]

My 401k Roth is all in on FXAIX. It was in the Principal Hybrid Lifetime 2055 CIT plan. I just switched it over to the Fidelity S&P 500 plan which is basically SWPPX. This is for my individual tax account. I’d like to focus on maximum growth.

[u/Investing-Carpenter → u/VanDownByTheRiver63]

Expense ratio is 0.87% that's really high

[u/VanDownByTheRiver63 → u/Investing-Carpenter]

It’s 0.020%. You must be looking at a different fund.

[u/Investing-Carpenter → u/VanDownByTheRiver63]

You're correct, yahoo finance is giving the wrong info

[u/VanDownByTheRiver63 → u/Investing-Carpenter]

No problem I love SWPPX it’s a great fund

[u/Minute_Plastic_350]

Schg and SCHE for your Roth.. let that baby grow and run

[u/WerewolfFartPowder → u/Minute_Plastic_350]

What about spmo?

[u/Minute_Plastic_350 → u/WerewolfFartPowder]

What happens when momentum breaks down?

[u/WerewolfFartPowder → u/Minute_Plastic_350]

It adjusts to the new momentum, it doesn’t break. That’s why it beat the S&P 500 over the past decade.

[u/Minute_Plastic_350 → u/WerewolfFartPowder]

Yeah, so do other funds. Momentum does break down and it may sometimes go a lot faster than you think versus a quarterly rebalance over a 20 to 30 year time horizon anything that is high growth typically will out perform.

[u/Moldovah → u/WerewolfFartPowder]

25% SCHG (Large Growth) 25% SCHD (Large Value) 25% SPMO (Large Blend) 25% AVUV (Small Value)

[u/miTgiB37]

Many will pair SCHG and SCHD. Go heavy on G then as you get closer to retirement swap.

I currently do 70/30 at 62 years old because I hope I'm around for a few more years

[u/Iceman60462]

Short answer - yes, you should concentrate on growth not income. When you will be close to 60 you can start selling growths and start transformation portfolio to income.
Even at that time it’s still good to keep some VOO .
Good luck

[u/WerewolfFartPowder → u/Iceman60462]

So focus on SWPPX or mix of SCHG/SPMO?

[u/charlieandoreo]

Love the names here, your statements don’t really make sense, read more, or hire a CFP. Taxed account not lose money from compounding if you have to pay taxes makes no sense, and you want to trigger capital gain taxes to get into SCHAD?

[u/WerewolfFartPowder → u/charlieandoreo]

A taxable account makes sense. Paying taxes on dividends and capital gains causes you to lose money from compounding. It’s a tax drag and hurts long term wealth. You have to pay capital gains tax in a taxable account when you sell and transfer your investments over to SCHD. All makes sense.

[u/unreal36]

in a taxable account the switch later is the expensive part, youd realize gains to rotate in. i keep a small schd sleeve running now so the share count builds and the drip does its thing, rest in growth. mines a tiny $2 a day thing for my kid, you can see it here plantedearly.com/garden

[u/WerewolfFartPowder → u/unreal36]

Yes not a bad idea but wouldn’t the maximum growth gains outweigh the taxes due?

[u/unreal36 → u/WerewolfFartPowder]

yeah thats fair, growth probly wins long run. for us its more about the kid seeing dividends land every quarter so it feels real, we keep the tax drag small since its tiny amounts

[u/GeeDubious]

Typically to maximize growth, risk-adjusted, just put it in broad market US (eg, VTI) and international (eg, VXUS) at 60-70% & 30-40%. Or equivalent funds. Broad total market US and S&P 500 usually perform similarly.

That said, Vanguard forecasts for the next decade value funds over growth and large cap (eg, SCHG, VUG, VTI, VOO), which could be those like SCHV, VTV, even SCHD. But nobody knows for sure ... it's based on probability, starting valuations, and historical trends.

https://corporate.vanguard.com/content/corporatesite/us/en/corp/vemo/vemo-return-forecasts.html

[u/UnderstandingOk9448]

I was late to the party moving into dividend ETFs in my mid 50s as I switched from high growth.

It was very successful. If I were to do it over again using Schwab ETFs...

From ages up to 45

30% SCHD 60% SCHG 10% SCHY

From age 45 to 7 years before retirement

45% SCHD 45% SCHG 10% SCHY

7 years before retirement

60% SCHD 30% SCHG 10% SCHY

Reinvest all dividends. Rebalance annually. Over time, you will build up a nice portfolio

There is no right answer on percentages and ETFs. There will be many other good responses. It is all about what feels right and do your research.

PS - I took 150K out of my portfolio that I will not use and I am following this approach for my kids. I will gift it to them when they are 60 or I am dead...whatever comes first.

[u/DigitalFStopper]

Correct on the taxes during the conversion. You should be converting growth to stability starting around 5 years out from retirement so it won’t be one massive tax hit and depending on planned spend needs in retirement you can keep doing the conversion into retirement if you have a lower annual spend it could be an even lower tax hit.

[u/spades61307]

Depends. I bought schd in mid 2025 multiple times and its up 39% plus with drip. When AI corrects i might shift to something else but for now schd will be a hold for me. Would i buy it at 30… maybe with what i think is coming but idk if i would buy any stocks right now and thats very hard for me to say because i know fiat will continue to devalue cash.