My review of the Schwab Dividend ETF (SCHD)

My strategy is simple.

I invest in quality dividend growth companies. I try to invest in those at attractive valuations, and try to equal weight them as much as possible from the start. In my case this means building my position in a way that I reach at least $500 - $1000 at the beginning. But also ensuring that I do not have more than $2,000 invested per position (particularly for the purposes of this newsletter project you are subscribed to, where I invest $1,000/month total with the goal of reaching $1,000/month in dividend income).

I do evaluate each company, and look for several key factors that are good predictors of future success.

1. Growth in earnings per share

2. Growth in dividends per share

3. Adequate dividend payout ratio

4. Good valuation

I try to be as passive as possible after I build a position. But during the process of building a position, I check to see how things are doing, in order to avoid putting money into a bottomless pit.

Once I build a position, I then let it ride. I am inspired by the coffee can approach to investing, where a solid portfolio of blue chip dividend stocks can grow on its own, and doesn’t need micro-managing. In other words, I let the winners run, and cut the losers (those unlucky few that turn out to cut dividends).