Another Income/Dividend question but different.

[dobig]

I guess my point was muddled. More black and white: the yields are half of what a bond even an muni bond could produce and the growth is better found elsewhere.

But over time the dividend yield will meet and then exceed that bond yield giving me inflation protection. What good is a 10 year bond yielding 4% if inflation is 3%? The numbers just don't make sense in my head.

Right now growth is secondary to me.

 

[dobig]

The more growth factor that is placed in the equation, generally, the less income (dividend) is expected. Equity/Income funds are a hybrid and not dividend dedicated.

But the dividend growth is usually higher. I can live with lower dividends in the short term knowing I'll be rewarded in the long term.

 

[Al18]

If you put $10,000 in SCHD 10 years ago, you would now have $33,601 now. That’s better performance than FBALX with an end ending balance of $29,786. SCHD has less volatility also, because in 2022 SCHD went down just 3.23%, but FBALX went down 15.18% according to https://www.portfoliovisualizer.com/fund-performance?s=y&sl=3ZM3UApPhGNSqgidbH87JC

I am selling some SCHD to fund my retirement - it’s not just about dividends

 

[YellowSubmarine]

But the dividend growth is usually higher. I can live with lower dividends in the short term knowing I'll be rewarded in the long term.

I can too, but I am an income player and I prefer "absolute/defined" returns.
Pre SS I had growth on my mind but now it's all in the monthly summation -results of cash in the accounts.
All we need is a 30% correction; then growth is not such a good idea -at 74.

 

[COcheesehead]

But over time the dividend yield will meet and then exceed that bond yield giving me inflation protection.

The dividend amount for SCHD nominally and as a percentage has actually dropped as of late. DGRO’s increased, but has dropped as a percentage. The basis has grown, but at a pace less than the market and yields are still below most bonds.
You obviously feel comfortable with it so stick with it. I was enamored with blended products like balanced funds for awhile until realized they were less than the sum of their parts. You can achieve more by concentrating on each part individually.
Just my two cents. I’ll show myself out now.

 

[TheWizard]

If you put $10,000 in SCHD 10 years ago, you would now have $33,601 now. That’s better performance than FBALX with an end ending balance of $29,786. SCHD has less volatility also, because in 2022 SCHD went down just 3.23%, but FBALX went down 15.18% according to https://www.portfoliovisualizer.com/fund-performance?s=y&sl=3ZM3UApPhGNSqgidbH87JC...

Correct, but compared to the ETFs I'm invested in, that amount of total return isn't all that super...

 

[dobig]

Correct, but compared to the ETFs I'm invested in, that amount of total return isn't all that super...View attachment 63625

That's great and a reason to be invested in growth but let's not forget what happened between 2000 and 2011.

 

[Brat]

You are comparing growth ETFs to an income ETF. Both "fruit" but apples and oranges.

 

[RetiredHappy]

You are comparing growth ETFs to an income ETF. Both "fruit" but apples and oranges.

Ah... but one should be looking at total returns. Oh, there was another thread about that already.

 

[ncbill]

The dividend amount for SCHD nominally and as a percentage has actually dropped as of late. DGRO’s increased, but has dropped as a percentage. The basis has grown, but at a pace less than the market and yields are still below most bonds.
You obviously feel comfortable with it so stick with it. I was enamored with blended products like balanced funds for awhile until realized they were less than the sum of their parts. You can achieve more by concentrating on each part individually.
Just my two cents. I’ll show myself out now.

So, 70% DGRO & 30% SPMO?

 

[Brat]

Ah... but one should be looking at total returns. Oh, there was another thread about that already.

I am 85 so downside risk is important. I do have growth investments where risk isn't a major concern. My roll-the-dice investment (buy Monday) is FRVO, a geothermal power company I have been watching for several years. Power plants quicker to build and safer than neuclar,

 

[TheWizard]

You are comparing growth ETFs to an income ETF. Both "fruit" but apples and oranges.

I see...

 

[COcheesehead]

What gets my head twisted is wanting growth with your income, one/both suffer. It’s certainly possible as evidenced by these funds. It’s simple, but there are better ways. No judgement. Invest the way you want. I do.

 

[OldShooter]

We pay no attention at all to the dividends that our fund burp out every once in a while. I have no idea how much or when. They are just reinvested. This is what we do: https://www.investopedia.com/terms/h/homemadedividends.asp

Really, IMO at least, paying attention to dividends is just a form of mental accounting. https://www.investopedia.com/terms/m/mentalaccounting.asp

 

[SteveTX]

So, 70% DGRO & 30% SPMO?

I have been considering something similar to the above, only using 30% VGT and 70% SCHD.
My reasoning being that you get the best players in the value side (dividend aristocrats SCHD) with the top growth stocks, VGT.
I used Portfolio Visualized to see a comparison of these over the last 10 years:

SPY shows: 15.1% TR, 15.7% STD, and 23.9% Max Drawdown. Current Yield = 0.95%

SCHD/VGT: 16.4% TR, 15.5% STD, and 20.7% Max Drawdown. Current Yield = 2.43%

This seems like a fairly compelling argument for the pairing if you want a bit more yield, anyway.
Edited to add "and a bit more total return".