Core Viewpoint - Schwab US Dividend Equity ETF (SCHD) offers a 3.7% dividend yield, which, while lower than some competitors, presents a compelling investment opportunity due to its focus on quality and growth rather than just yield [2][6]. Group 1: Yield Comparison - The S&P 500 index currently yields around 1.2%, making SCHD's yield nearly three times larger [3]. - Invesco High Yield Equity Dividend Achievers ETF offers a higher yield of approximately 4.5%, which may attract yield-focused investors [3][6]. - A 4% yield is often considered a key threshold for retirement income, as it allows for sustainable withdrawals without depleting principal [5]. Group 2: Investment Strategy - Schwab US Dividend Equity ETF employs a nuanced investment strategy, focusing on stocks that have increased dividends for at least a decade, rather than simply selecting high-yield stocks [8][9]. - The ETF evaluates stocks based on a composite score that includes cash flow to total debt, return on equity, dividend yield, and five-year dividend growth [9]. - The ETF's approach has resulted in a generally rising dividend and share price, contrasting with the more yield-focused strategy of Invesco, which may lead to less attractive dividend growth [11]. Group 3: Long-term Considerations - Dividend growth is crucial for maintaining purchasing power against inflation, and over time, SCHD may provide more income than higher-yielding ETFs that lack growth [12][13]. - Including SCHD in a portfolio alongside higher-yielding options can offer protection against inflation while providing a solid long-term investment strategy [13].