SCHD Is at an All-Time High. Here's Why I'm Still Buying

Every comment I'm getting right now says the same thing: SCHD is at an all-time high; don't buy it here; wait for a pullback.

Well, I bought more this month, and it felt good.

And I'm going to show you the math I'm using — including the part of the SCHD story that's genuinely gotten worse, which nobody covering this fund seems to want to talk about.

The All-Time-High Instinct

Let's start with the all-time high thing, because it's one of the most expensive instincts in investing.

An index fund that tracks a growing economy is supposed to spend most of its life at or near an all-time high. That's what working looks like. If a fund is never near its high, that's the real problem — and maybe one you should think twice about investing in.

Think about how many all-time highs the S&P 500 has hit in your lifetime. The headlines on CNBC with that new S&P 500 record. Now think about what happened to the people who sat out every single one of them, waiting for a better entry.

A fund reaching a high isn't a stock analysis. Think of it like a feeling. And it's a feeling that has cost more people more money than almost any other single idea in this space.

Trust me, I've waited for the dip many times. And when the dip didn't dip, and I started doing the math, it got even harder to jump in. That's probably one reason I keep talking about investing a thousand dollars every Friday, whether the market is soaring to new highs or crashing. Let me explain.

So What Am I Actually Doing?

So if I'm not timing entries, what am I doing?

I don't buy whichever fund looks best. I buy whichever one has been getting beaten up.

When growth is running, and SCHD is flat and boring, that's when I add to SCHD. When growth gets hit, and everybody's panicking about tech, that's when I add to the growth side. I put the same money on the same schedule; it just goes wherever the discount is. Well, I hope so anyway.

It's not a perfect system, and I'm not going to pretend I've optimized anything. But it does two things that matter more than optimization: it keeps me buying in every environment, and it stops me from having to be right about what happens next.

That second one is the whole point. I don't need an opinion about the market to keep executing.

The Part I'd Rather Not Tell You

Now here's the part I'd rather not tell you, and it's the reason I made this post instead of just replying in the comments.

SCHD's dividend growth has slowed down dramatically. Not a little. Dramatically.

Over ten years, this fund grew its dividend at roughly eleven percent a year. Over five years, roughly eleven percent. Over three years, it drops to around eight. And over the last twelve months? Roughly two percent.

Two percent. That's barely keeping up with a normal inflation year. Not even close, with everything going on in the world right now.

And it's not one weird quarter. If you look at the last four quarterly payments, the two most recent ones each came in below the one before it.

Now, SCHD's payments are lumpy by design. The December payment is usually the biggest, so quarter-to-quarter comparisons can mislead you. But the ten-year to five-year to three-year to one-year trend line isn't lumpy. It's a slope, and it points down. And it hurts to admit this, because I do love my SCHD.

If you bought this fund specifically for compounding dividend growth, and a lot of people did, because that was the entire SCHD pitch, you need to sit with that number. That's a real deterioration in the core thesis.

I'm not going to explain it away. I don't fully know why yet. But I'd rather tell you the number and let you decide than pretend I didn't see it.

So Why Am I Still Buying It?

Because I'm not buying SCHD for the dividend growth rate. I'm buying it for the job it does in my portfolio.

Here's what makes my situation different from a lot of people watching this. I run multiple businesses. My income isn't a salary — it's operational, lumpy, and carries real risk I can't diversify away. I already own more volatility than most people will take on in their lifetime, and I own it in the form of companies I can't sell on a Tuesday.

So the last thing my portfolio needs is more excitement. I need a leg that's boring on purpose.

That's what SCHD is. Look at what's actually in it: heavy healthcare, heavy consumer staples, meaningful energy, and under ten percent technology. Those are companies that sell things people buy in a recession. That's not the fund that makes you rich. That's the fund that's still standing when the other one isn't.

Don't get me wrong — at the time of writing this, SCHD has crushed it year to date, and that's exciting. But I also need to be realistic about a few things. I'm approaching fifty. There's no inheritance coming. There's no pension. There's no safety net behind me except what I build.

When you're in that position, the value of a boring, reliable, low-cost leg goes way up, even if its dividend growth is having a bad year. The slowdown matters. It doesn't change the job.

The Other Side of the Argument

Now let me argue the other side properly, because there are good arguments here and you should hear them.

One: if you're twenty-five with a forty-year horizon, a fund built for stability is probably the wrong tool. Time is the thing that absorbs volatility, and if you have a lot of it, you can afford to own the volatile thing. That's a legitimate criticism of putting SCHD anywhere near the center of a young portfolio.

Two: if you already hold an S&P 500 fund, you own a lot of this already. SCHD overlaps meaningfully with VOO — roughly half of SCHD by weight shows up inside VOO too. You're not diversifying as much as you think.

Three, and this is the sharpest one: if the dividend growth stays at two percent, the entire dividend-growth thesis for this fund is broken, and you're just holding a low-cost value fund with a decent yield. Which is fine! But it's not what was advertised.

I don't have a rebuttal for that third one. I'm watching it. And if it stays at two percent for another year or two, I'll have to say something different than what I'm saying today, and I'll come back and say it.

What Would Actually Make Me Stop Buying

So let me be concrete, because "I'm watching it" is what people say when they have no plan.

Here's what would make me stop buying: if dividend growth stays under three percent for two more years, the growth thesis is dead, and I'd treat this as a pure income holding, sized differently. If the expense ratio moves meaningfully, the whole low-cost argument weakens. If the index methodology changes in a way that lets in higher-yield, lower-quality names, that's the failure mode for every dividend screen ever built, and I'd want out.

What would not make me stop: the price being high. That's not on the list, and it never was.

So that's my honest take on where I see SCHD today. The fund is at a high, its dividend growth just had its worst year in a decade, and I'm still buying it, because it's doing a specific job in a portfolio that already carries more risk than it needs.

If your situation is different than mine, your answer should be different than mine. That's not a cop-out. That's the actual point. We all have a different investing DNA.

Watch the full video above, or on YouTube: https://youtu.be/mEIypOEuPog