2 Reasons Why I Can't Stop Buying the Schwab U.S. Dividend Equity ETF

Core Viewpoint - The Schwab U.S. Dividend Equity ETF (SCHD) is a strong investment option due to its high dividend yield and consistent total returns, making it attractive for generating passive income and achieving financial freedom [1]. Group 1: Dividend Income - The ETF provides a 3.5% dividend yield, significantly higher than the S&P 500's yield of approximately 1.1%, allowing for greater passive income generation [6]. - The fund's holdings have increased their dividends by over 8% annually over the past five years, contributing to a steady rise in income distributions for investors [7]. - The strategy of investing in high-yielding dividend stocks aligns with the goal of generating a reliable stream of dividend income [4][9]. Group 2: Total Returns - Since its inception in October 2011, the ETF has delivered an average annual return of 12.9%, with over 10% annualized returns in the past five and ten years [10]. - The fund's focus on companies that grow their dividends has historically outperformed other categories, such as companies with no dividend changes and dividend cutters [11]. - Sustainable earnings growth is a key factor driving both dividend increases and stock price appreciation, supporting the ETF's value [12]. Group 3: Investment Strategy - The ETF's strategy of investing in 100 high-yielding dividend growth stocks aligns with the need for a steadily rising income stream and strong total returns [13]. - This approach is seen as a "wealth-compounding machine," enabling faster achievement of financial goals [13].