I don't see that the volatility of 50/50 schd/dgro is really that different than 100% VOO:My thought was to invest half of the money in SCHD and the other half in DGRO. My rational behind this is:
b) while I don't mind volatility, the volatility in something like VOO is beyond my comfort level. SCHD and DGRO have a value/quality tilt and seem to have a lower stand deviation than VOO + have experienced much smaller drawdowns than VOO in market declines
Source
the volatility was 1.23% less. That's a rounding error. And the drawdown was actually worse (-34.15%) than VOO (-33.99%), still a rounding error, but I don't see why you'd substitute schd/dgro for VOO. VOO had higher (slightly) sharpe and sortino ratios which means there was some amount of risk you took with schd/drgo that wasn't compensated when compared with VOO (again a small amount to be called a rounding error).
It's possible that when Value outperforms growth schd/dgro might outperform VOO and maybe the numbers are just such that Growth has done well, but VOO is a mix of value and growth, of late it's been larger on the growth domain (since 2023 it's called Large Growth according to morningstar, but prior it was large blend).
I'd be more concerned about your statement that your current income covers your expenses (barely) especially over the next 10 years (if you're not planning on using this money for at least the next 10 years. How do you plan to have your income keep pace with inflation over the next 10 years?
Statistics: Posted by arcticpineapplecorp. — Fri Sep 06, 2024 9:24 pm — Replies 3 — Views 364