SCHR
Schwab Intermediate-Term U.S. Treasury ETF
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What are some of your critiques of this version of the all weather portfolio?
I've read the book and watched the movie...but I'm still not sure what to do here...
Mentions
you should align your bond investment with your liquidity needs. if you like the 5% on the 10 year and want to lock that in for the full duration and you know for sure you don't need liquidity then go with a long duration ETF like SCHQ. BND and GOVT are mixed duration ETFs with long, short, and medium exposure so these are not specific to the 10 year yield. in general I don't recommend mixed duration ETFs unless you are in retirement and just need fixed income. another strategy that works for many people is to set up a bond ladder with each duration so for example put 1/3 of your bond allocation to short duration like SCHO, 1/3 to medium duration like SCHR, and 1/3 to long duration like SCHQ. Vanguard also has a nice line up of target date maturity ETFs.
This joke was funny the first two times someone made it For THE LOVE OF GOD PLEASE STOP WITH SCHRÖDINGER!
Hello, I’m new to investing (22yo) and am looking to get some advice on my current weekly investments. With $400/week available to invest/save, I am currently putting it into: SPAXX (For savings): $115 SCHR: $55 SCHD: $55 FXAIX (Roth IRA): $65 SCHB (Roth IRA): $65 SPAXX, SCHR, & SCHD are investments/savings for money to use to buy a home within the next 4-5 years, and FXAIX & SCHB are my investments in my Roth IRA. What changes would you recommend I make if any?
I know literally one person who knows anything about the stock market and they are just an acquaintance. They said we should put as much money as possible in the following stocks because they are at a record low: SCHF, SCHA, SCHR, SCHX I would love to hear opinions from anyone who knows what they are talking about. I’m ready to pull the trigger and put 1-4k in each of those.
I use an ETF despite the fee because I don’t want to manage my collection of Treasuries myself. SCHQ, SCHO, and SCHR.
I’m Gona invent a theory called SCHRÖDINGERS PUT
I understand that theres a strong emotional comfort in fully owning your homes equity, but that mortgage is so cheap i would not make more than the minimum payment. Why? The opportunity cost of investing in the markets. The expected returns of taking on those compensated risks do far more for net wealth creation than paying of super duper cheap 3% debt. I would hold onto that debt for dear life because its so cheap. From what youve described, you need a multi-asset diversified portfolio. We are talking some equities, some long treasuries, some intermediate treasuries, a utility stock fund, and a dash of gold. This mix is a modified form of ray dalio's "all weather" portfolio. I like the way this guy writes it up. https://www.optimizedportfolio.com/all-weather-portfolio/ This is what that would look like. 30% VTI (market index) 40% VGLT (long treasuries, negative correlation with index) 15% SCHR (intermediate treasuries, smooth the ride) 8% FUTY (utilties, low correlation with market index) 7% GLDM (gold etf) And argument could be made to use TIP (treasury inflation protected securities) instead of gold for even lower volatility. Its max drawdown is far far less than equities, and its volatility is also much less. Using this money, a bequest for your father to you, to secure your families financial future in retirement would be a fantastic idea. This portfolio matches that youre rather averse to risk, and it will beat inflation better than just bonds or cash savings will.
You could be my brother. Out fathers are even the same age and mine also lost a lot of money in options as his mental acuity declined over the past few years. (Although my father is a widower.) (I'm now also worried about myself should this happen to me -- declining acuity can be a big threat to future financial security.) My Father's main account is with Schwab and he had a lot of cash in the default bank fund that pays 0.145% interest (or something like that). So, make sure any cash is in a Money Market if in Schwab as they don't have a decent "sweep" account. My Fathers has an IRA and Brokerage account. Because he was trading options and was a frequent trader the brokerage has minimal account balance requirements ($25K). You might need to check for that. I recently had to do an IRA distribution to keep it over $25K (an RMD, though). If in an IRA, you often need permission to trade options so look at having that removed from the account. That would probably take his agreement unless you get power of attorney, etc. I have yet to do this. My father also had an account at Interactive Brokers he had forgotten about. Look out for lost accounts. In this case, leaving it alone from 2019 to 2023 made it the best performing account. Taxes were a bit of a mess. 50+ pages in the end of year tax docs with all those option transactions in the (taxable) brokerage account. He was also only doing RMDs from the account he remembered and was under-withholding for fed taxes owed. My basic approach was find missing accounts and consolidate them (for one, that makes the RMD easier to figure out as well as taxes) then moved his cash into duration appropriate bond funds (max 5 year duration) and money market funds. Stocks were in the Interactive Brokers account which was closed and moved to Schwab and re-invested in bond funds. I left his small gold position and since he also is still interested in call options we put some in JEPI (let the pro's handle the details on options). Others include JPIE, MINT, SCHO, and SCHR. He also needed a lot of help making sure property taxes are paid on time, taxes are filed, bills paid and he is not defrauded (really, SunRun at Costco exit path, he does not need a leased solar system at age 83), etc. I've had to understand his cash flow to get an idea of how long until he runs out of money and make sure that is kept in mind for investment decisions.
I like IEF for this. Not as short as 5 year duration but not way out there like TLT. Yield to maturity is about 4%. Or something like SCHR for 5 years with a 4.35% yield to maturity. For a bit more yield FBND but that also has corporate bonds (still, GOLD rated by Morningstar). (I own all three.) Also look at JPIE. 3.82 year effective maturity. Fees are a bit high but yield is pretty good. Note the Fed does not set bond rates, the market does. The longer the duration the less impact Fed interest rate changes will make. So, I look for a bond fund duration of 8 years, or less (intermediate). I prefer treasuries and look for low fees. I'm not buying the TLT story due to the duration. Intermediate duration funds like FBND, IEF and SCHR have outperformed TLT,in the past year.
My Father (83) uses: JEPI JPIE MINT SCHO: Short term treasury SCHR: Intermediate treasury Money Market fund If she is 70, I'd add more equities then the above as JEPI is really the only equity exposure and has limited upside. To keep it simple, could select one of these: [https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds](https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds)
The fee on VMACX (1.2%) is very high. If you're set on dedicating funds to mid-caps I'd shop around for a fund with lower fees. However, having said that... I suspect that your allocation to mid and small cap is larger than it should be, and that you chose 25% based on it being a round number rather than the right allocation for your risk tolerance. That doesn't mean it's necessarily wrong, just that I have a suspicion that you are taking on considerably more risk than you think you are. Personally, I do a [Three-Fund Portfolio](https://www.bogleheads.org/wiki/Three-fund_portfolio). If you wanted to do something similar, you could do the following: * SWPPX - S&P 500 (60-100% depending on your age and risk tolerance) * SWISX - International (0-20% depending on your age and risk tolerance) * SCHR - Intermediate term bonds (0-20% depending on your age and risk tolerance)
Similar situation. Moving Money Market funds to Intermediate bond funds IEF, SCHR (Treasuries), MINT for future cash, JEPI for income with some appreciation. FBND if you want more yield with corporate. IEF and SHR have 6 to 7 year duration but I expect some capital gains over next two years. I also like VEMBX for emerging market bonds. I try to keep most bonds in Treasuries and use stocks for more risk/appreciation as opposed to corporate bonds (which are going to be more correlated to stocks then Treasuries).
BND has an effective duration of 6 years and a yield to maturity of 4.85%. Hold it for 6 years, re-investing the dividends and your shares would be worth about 38K in six years (4.85% annually on a 29K investment for six years). It holds government and corporate bonds. Risks include bond defaults (should the economy sour and some of the corporate bonds held in the fund default -- that is an issue in that corporate bonds may be more correlated to stocks because of this). You also need to understand duration (very important) when buying bonds/ bond funds and the relationship to interest rate risks. >> Also, is bnd expected to go down in value over the next few years as interest rates go down? For BND, the value would probably rise as rates drop in the next few years as it has a 6 year duration (the bonds it holds will continue to pay higher rates even if current rates drop making the fund worth more). A bond fund with 3 month duration would see it's price follow rates down. A bond fund with a 20 year duration would rise in value more so then BND; but things get riskier when you buy such long duration bonds. Note that if rates rise, the fund price drops. It works both ways. [https://www.bogleheads.org/wiki/Bond\_basics](https://www.bogleheads.org/wiki/Bond_basics) [https://www.bogleheads.org/wiki/Individual\_bonds\_vs\_a\_bond\_fund](https://www.bogleheads.org/wiki/Individual_bonds_vs_a_bond_fund) [https://www.morningstar.com/markets/pimcos-ivascyn-why-investors-should-switch-their-6040-portfolio-4060](https://www.morningstar.com/markets/pimcos-ivascyn-why-investors-should-switch-their-6040-portfolio-4060) [https://www.morningstar.com/financial-advisors/its-been-terrible-time-bonds-heres-why-you-should-own-them](https://www.morningstar.com/financial-advisors/its-been-terrible-time-bonds-heres-why-you-should-own-them) Bonds are not 'safe' per say (people think they are safe because 'bonds'). They are complex, have risks, and it takes a bit of a deep-dive to understand them. Having said that, I think BND meets your needs to reduce risk. Personally, if it is 20% of the portfolio, I'd look for an intermediate duration treasury fund (no corporate bonds) to protect a bit better against market downside as corporate bonds are more correlated to stocks then treasuries. Something like SCHR or IEF for more duration.
A bond fund will pay the current yield to maturity if held for the duration of the bonds in the fund when purchased. Example, SCHR has a duration of about 6 years and pays 4.8% yield to that maturity (https://www.morningstar.com/etfs/arcx/schr/portfolio). Buy now and over the next 6 years the fund price may go up or down but in the end you should get a 4.8% return. The important part is to match your expected need (when will you need the money) to the fund's duration so you don't sell early and get your expected return. People that bought a Vanguard ETF 5 years ago were getting 1% (just a guess as an example) and thats' what they will see when you account for the fund price dropping but taking into account the interest paid over the years has risen over the initial 1%. So, they still get what they signed up for if held for the duration when you add up the higher accumulated interest payments and the lower sell price -- it comes out to (roughly) the 1% on the initial investment.
VTWNX also holds stocks so it is also designed for some capital gains. Of course, that means risk is higher. So, you should look past the yield unless you are mostly interested in income. (VTWNX was up 12% in 2023 and 10 year average return is around 6%/year). My 83 year old father uses the following for an income stream in a Schwab account (listed least to most risk): 55% SNVXX Money market currently paying 5.04% [https://www.schwabassetmanagement.com/products/snvxx](https://www.schwabassetmanagement.com/products/snvxx) 15% SCHO Schwab Short-Term US Treasury ETF currently paying 4.94% [https://www.morningstar.com/etfs/arcx/scho/quote](https://www.morningstar.com/etfs/arcx/scho/quote) 15% MINT PIMCO Enhanced Short Maturity Active ETF paying 5.34% [https://www.morningstar.com/etfs/arcx/mint/quote](https://www.morningstar.com/etfs/arcx/mint/quote) 15% JEPI JPMorgan Equity Premium Income ETF paying 6.82% [https://www.morningstar.com/etfs/arcx/jepi/quote](https://www.morningstar.com/etfs/arcx/jepi/quote) Some of the funds in SNVXX and SCHO are possibly moving to longer duration bonds (SCHR) in near future. This article has some good info on withdrawal rates for a poprtfolio in retirement: [https://www.morningstar.com/retirement/good-news-safe-withdrawal-rates](https://www.morningstar.com/retirement/good-news-safe-withdrawal-rates) See the chart in that article titled: 30-Year Starting Safe Withdrawal Rate %, by Asset Allocation From that chart, a 0% equities portfolio (all bonds) can safely withdraw 6.7% of the portfolio, per year, for 15 years. So with 220K starting, that is about $14.5K per year. You adjust the 14.5K up by inflation each year. So if inflation is 10% in year two you would be 14.5 + 1.45 = 15.95K (in year two). I use 10% inflation to make the math easy -- hopefully we never see that. But basically it is 14.5K per year keeping the same purchasing power over time. So, that is what they have to work with using 'conventional' strategies as outlined in that article where you want a 90% probability it lasts 15 years. You can also see columns for 10 years and 20 years, etc. if you want to plan for a shorter or longer life spans. Mix in some equities and you can (historically) take out more. But, bonds are doing pretty well now so equities don't add as much as you might think (at least according to that article). Back to VTWNX as an example: It is 40% stock and 60% bonds. According to the chart, for 15 year life, your starting number is 6.8% of the portfolio. Not a big jump (0.1%) over an all bond portfolio yet with more risk. A 10% equities and 90 bonds actually has a higher withdraw rate at 6.9%. (Bonds returns are pretty nice right now.)
Yield curve has been inverted for almost two years. Stocks did OK. Bonds are down (long term bonds are down 14% in past year, see TLT; intermediate term down about 5% past year, see SCHR). It's just really, really, hard to know what do; conventional wisdom says diversify across asset classes setting the allocation to the different classes based on your time horizon.
First, do you mean SW***L***SX, not SWGSX? I can't really find much on SWGSX, but what I can find suggests its a GNMA fund, not a growth fund? Anyways, besides that, SPY/VTI/SCHV all almost entirely overlap (SPY is large-cap US companies; SCHV is a value-factor subset of large-cap US companies; and VTI is all sizes of US companies, including large-caps). This doesn't add diversity atop just owning VTI, instead it just creates an odd *concentration* into certain things (large caps in general, particularly value-factor large caps). I'd just replace *all* of those holdings with VTI, myself. Finally, "15% in money markets"? I'd buy an intermediate-term government bond fund like VGIT, SCHR, or GOVT instead. The usual, Bogleheads approach is to hold bonds (often gov't bonds) instead of straight cash.
All true. But I was never a believer of inflation and I'd continue to buy TLT all the way down. Im not sure we'll see QE ever again but certainly dont feel U.S. debt or economy could withstand much higher rates without rolling over thus lower rates. Stagflation only real worry. I trade TLT constantly and would never go all in. Also bonds catch bids during a crisis. Many factors in my favor IMO. Now at 3.75% i wouldnt take that chance. But again it was a bet on my part. Of course it could've gone wrong. I also laddered SCHR and SCHO with it so i had short term as well.
I am in my late 20s and this is my roth ira portfolio (long term); 70/30 split with stocks/bonds VOO VEA VYM VB VWO VO IGIB IAGG VTIP I am considering removing vtip and replacing it with vnq, between treasury and corporate intermediate (IGIB vs SCHR) and also rebalance the whole account. Any thoughts on ETF picks and/or new additions?
SCHRÖDINGER'S CAT = TIMOTHY'S STOCK JUST DON'T OPEN THE APP 
SCHRÖDINGER'S CAT = TIMOTHY'S STOCK 
Ah ok. I misunderstood the ETF. I thought they were buying 3 and 10 yr bonds and holding to maturity. What are your thoughts on SCHO Vs SCHR if you plan to hold for 10+ years?
Sort of. Most bond funds continually refresh their bonds. For example, SCHR will sell bonds once they have three years to maturity and replace them with bonds with ten years to maturity. Also, bond funds distribute their income, so even while the total return goes up, the NAV may not go up the same way.
I am looking in to SCHR. I am a bit unclear on why the NAV was so high in 2019 through 2021 and then dropped so much. If this ETF holds Treasury Notes why would the NAV change so much? Is there some long term risk here that I am not understanding?
If using index ETF's/mutual funds, you only need a couple to be diversified. As you're starting out, I'd suggest this simple portfolio: * 60% VTI * 25% SCHR * 15% GLD If you think non-US stocks will go better in the future because US stocks have gotten expensive, then consider this: * 60% AVGE * 25% SCHR * 15% GLD The first portfolio is pretty low cost. The second portfolio is only slightly higher in cost but still pretty low. It's hard to find another mix that will give you better risk adjusted returns. Since 1978, this portfolio would have given you a 9.93% CAGR (Compounded Annual Growth Rate) with a maximum drawdown of 27.62% vs. a 100% stock market portfolio which would have given you an 11.42% CAGR but with an almost 51% max drawdown. I don't know about you, but the first portfolio would give me a lot of peace of mind.
How does it back test vs. - 65% AVGE (since you want ex-US title… but you can use VTI for testing) - 25% SCHR (or IEF for more data) - 10% GLD
You’re young and think the US won’t perform as well vs. other countries in the next decade give or take a few years? Keep it simple: 65% AVGE 25% SCHR 10% GLD Consider moving 5% from AVGE to GLD once you’re past age 35. You’ll be hard pressed to find a simpler allocation that gives you similar returns with relatively low drawdowns.
I’m convinced after doing a lot of research that this 3-fund portfolio is great for accumulating assets or during drawdowns in retirement: 60% VTI 25% SCHR 15% GLD There’s a side to me that says ex-US equities may outperform in the next 10-years, in which case I’d go with: 60% AVGE 25% SCHR 15% GLD AVGE is very new and SCHR is relatively new… if you want to test further back, I’d replace SCHR with IEF. Don’t have a replacement for AVGE. The benefits of this portfolio is great returns while minimizing drawdowns in bear markets. This is both good while accumulating and in retirement. The former for psychological reasons so you’ll stick with it. The latter for a higher safe withdrawal rate. Rebalance once a year (heck once every couple of years) and you’re good to go.
You can look into treasury ETFs which are a very easy way to get exposure and are bought just like stocks. Funds like SCHO, SCHR, TLT, etc. Know that they can go down in market value, just like treasuries.
You need to look at the right ETFs. Ones that focus heavily on bonds (10+ year maturities) will increase dividends much slower since they aren't going to sell holdings at a loss, thus it's a long painful process watching them move holdings into newer higher yielding securities. This is certainly one disadvantage to bond ETFs, but they're designed to be held for a while with the expectation that they average out rates over their target duration; but on the flip side buying them in a rising rate environment allows you exposure to these increases without having to shell out $1K minimum for each new rung you want to add onto a ladder and an easier time liquidating them when you want to exit the position. Look at $SCHR, 3.14% 30-day SEC yield (read: annualized yield based on the most monthly recent dividend distribution). The current US10Y yield is 2.97% and the US2Y is 3.15%. It's also down 10% YTD in NAV, so you're buying at a discount and as either time passes with stable yields, or rates fall, the NAV will recover just like the face value of bonds and you can liquidate for a tidy profit. There's plenty of other ETFs in this category, but it gives you an idea of what to look for.
I buy SCHQ and SCHR when I want to buy bonds.
Easy solution. Stop trying to pick stocks and beat the market. The beauty of indexing is you don’t need to know anything about the actual companies. Just go all in VT with a little mix of intermediate treasuries to dampen volatility. Set and forget see ya in 30 years! For example my account is 80% VT and 20% SCHR and i’m in my early 20’s.
That's a good point, thanks. Yeah, it's all ETFs and closed end funds. Examples of green ones this morning are FNDX, FNDA, SCHF, SCHE. My red ones are def bond-related - SCHR, VCIT. Thanks for the insight, I really need to learn more about this stuff.