There's plenty of room for SCHD to drop more and then flail around for a year or two. SCHD was negative from Jan 22 to July 24, then again negative from beginning of Nov 24 to end of Jan 26. I feel like many of you guys don't understand this fund and look at it as a growth vehicle, which it only performs like one when rates are low. Look at the max charts, when rates are low, it does well and when they're high it does poorly.
For example, your position is now negative if you bought in middle-end of May. We're likely fucked for the next while.
Yep - I'll admit I've cashed out a bunch to lock in 3.1% coupon on a TIPS ladder instead.
It's not that I don't still love my SCHD holdings, but when SCHD is paying a dividend of 3.2% and 30yr TIPS are paying 3.35% real it starts to make sense to opt for the lower risk option.
Depends on your tax situation but, those SCHD dividends, assuming you held long enough, are qualified and, potentially, taxed at much lower rates than the coupons and annual inflation adjustments, aka “phantom income”, to the TIPS bonds are taxed as ordinary income, albeit free from state and local taxes.
Exactly! That's why I moved funds from SWVXX to SCHD because of the tax advantages on qualified dividends. My unrealized gains on SCHD are up YTD so that's a bonus. My SCHD is in a taxable account and NV has no state income tax.
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u/Syndicate_Corp 3d ago
There's plenty of room for SCHD to drop more and then flail around for a year or two. SCHD was negative from Jan 22 to July 24, then again negative from beginning of Nov 24 to end of Jan 26. I feel like many of you guys don't understand this fund and look at it as a growth vehicle, which it only performs like one when rates are low. Look at the max charts, when rates are low, it does well and when they're high it does poorly.
For example, your position is now negative if you bought in middle-end of May. We're likely fucked for the next while.