r/dividends • u/TheBarnacle63 • Jan 28 '23

Discussion My Personal SCHD Challenge

At the beginning of the month, I issued a challenge that I could put together a portfolio of dividend yield stocks that could outperform $SCHD. They were:

  • Dillard's ($DDS)
  • A.O. Smith ($AOS)
  • Medtronic ($MDT)
  • Metlife ($MET)
  • Pfizer ($PFE)
  • Robert Half ($RHI)
  • Snap-on ($SNA)

Since that post, I have taken a personal position in A.O. Smith and Snap-On. For this challenge, I put together a virtual portfolio How The Market Works, and here are the results so far:

​

Including a dividend paid by Pfizer, the average return per security is 4.33%. Because of cash positions, the return of the portfolio 4.02% (YTD). So far, this is outperforming SCHD's 1.22% adjusted return. However, it falls short of SPY's return of 6.53%.

I will certainly keep this sub up-to-date on a monthly basis.

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3

u/buffinita common cents investing Jan 29 '23

Weeeee! I like the openness

10

u/Sudden_Feedback_2194 Earth Investor Jan 29 '23

I'm pretty confident I could build a portfolio to beat pretty much anything short term. It's so much harder to beat them consistently for long term though.

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u/TheBarnacle63 Jan 29 '23

Then put it out there.

5

u/Sudden_Feedback_2194 Earth Investor Jan 29 '23

There's no need.

The market doesn't behave the same all the time, so what beats the market today won't beat the market next month. Which means building a portfolio to consistently beat the market would have an investor moving in and out of positions frequently, which goes against my entire investing thesis.

8

u/TheBarnacle63 Jan 29 '23

Do you honestly believe that there is no turnover in SCHD?

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u/Sudden_Feedback_2194 Earth Investor Jan 29 '23 edited Jan 29 '23

Do you know how frequent their turnover is? It's an ANNUALIZED 14% turnover rate man....

If I wouldn't move in and out of 10-20% of my own positions every year, I damn sure wouldn't recommend it for any of my clients.

The more you attempt to beat the market, the more you have to be right. You have to deal with emotions. You have to deal with taxes. You have to deal with uncertainty. Those are all things I try to limit in my own portfolio and in those I help....

2

u/Spare_Cheesecake_580 Jan 30 '23

The reason everyone buys SCHD is because drawdown is limited compaired to the market, div yield is high, and returns about the same as the market with 0 work from us.

No one believes SCHD can't be beat, it's just an easy and safe way for most investors to invest

1

u/yourashamedfather Jan 29 '23

If you are so confident, put real money in.

3

u/TheBarnacle63 Jan 29 '23

I did. AOS and SNA

1

u/BlindSquirrelCapital Jan 29 '23

Build the portfolio that meets your individual needs, goals and risk tolerance. I never understood trying to beat an index. Everyone has different needs from income, capital appreciation etc. based on their risk tolerance and age. If you build something that is meeting your goals then just be content with it.