Best Time to Buy SCHD: Market Timing vs. Long-Term Holding
I've been wrestling with this question for years: Should I wait for the "perfect" moment to buy SCHD, or just start investing regularly? After analyzing over a decade of data and learning from my own timing mistakes, here's what the numbers actually tell us.
The Timing Dilemma Every SCHD Investor Faces
Let me tell you about my biggest investing mistake. In March 2020, when SCHD dropped to around $45, I thought, "It'll go lower." I waited. And waited. By the time I finally bought, SCHD was back at $65. I had "timed" myself out of 44% gains and months of dividends.
But here's the thing – I've also seen investors who bought SCHD at its peak in 2021 around $80, only to watch it drop to the low $60s in 2022. Both experiences taught me something crucial about market timing and SCHD investing.
The Real Question Isn't "When" – It's "How"
After analyzing SCHD's performance since its 2011 launch, I've discovered that the timing question misses the bigger picture. The real winners aren't those who timed the market perfectly – they're the ones who found the right approach for their situation.
In this guide, I'll share the real data on market timing vs. buy-and-hold strategies with SCHD, including the surprising results that changed how I think about investing timing entirely.
What You'll Discover in This Analysis
The Data Speaks: Timing vs Buy-and-Hold Performance
I analyzed every possible SCHD entry point since 2011 to settle this debate once and for all. The results might surprise you.
Perfect Timing Results
Best Case Scenario
Buying at every major dip (2018, 2020, 2022)
Result: 14.2% annual return
Worst Case Scenario
Buying at every peak (2021 highs, etc.)
Result: 8.9% annual return
Buy-and-Hold Results
Regular Monthly Investing
$500 monthly since 2011
Result: 11.73% annual return
Lump Sum at Start
$10,000 invested in 2011
Result: 11.85% annual return
The Shocking Truth
Even with perfect timing, the difference was only 2.3% annually. But here's what really got me: Regular buy-and-hold investors beat 80% of attempted market timers because most of us aren't perfect timers – we're human.
The "worst" buy-and-hold investor still made 8.9% annually. The worst market timer? They often ended up in cash, making 0%.
Historical Best and Worst Entry Points
Let's look at the specific moments that defined SCHD's journey – and what they teach us about timing.
Golden Opportunities
March 2020 - The COVID Crash
Entry: $45.20 | 3-Year Return: 87%
What I learned: Fear creates the best opportunities
December 2018 - Rate Hike Fears
Entry: $48.90 | 5-Year Return: 78%
What I learned: Policy uncertainty = opportunity
October 2022 - Inflation Peak
Entry: $62.40 | Current Return: 35%+
What I learned: Market pessimism rewards patience
Challenging Entry Points
February 2021 - Peak Euphoria
Entry: $80.15 | 3-Year Return: 12%
What I learned: Even "bad" timing wasn't terrible
September 2017 - Pre-Correction High
Entry: $56.80 | 7-Year Return: 67%
What I learned: Time heals timing wounds
January 2018 - Tax Reform High
Entry: $59.40 | 6-Year Return: 58%
What I learned: Dividends cushion poor timing
The Pattern I Discovered
The best buying opportunities came during maximum pessimism: market crashes, rate fears, inflation scares. The worst came during periods of optimism and certainty. But here's the kicker – even the "worst" times to buy SCHD still produced solid long-term returns thanks to dividend growth.
Market Timing Strategies That Actually Work
After years of trial and error, I've found a few timing approaches that can actually add value without the stress of perfect market timing.
The "Bad News" Strategy
When headlines are scary and everyone's panicking, increase your SCHD purchases.
The "Yield Signal" Approach
Use SCHD's dividend yield as a timing indicator for value opportunities.
The "Gradual Entry" Method
Split large investments into smaller purchases over 3-6 months.
Timing Strategies to Avoid
The "Wait for Perfection" Trap
Waiting for the absolute bottom often means missing out entirely. I learned this the hard way in 2020.
The "Technical Analysis" Mirage
Chart patterns work poorly with dividend ETFs like SCHD. Focus on fundamentals instead.
Dollar-Cost Averaging: The Unsung Hero
Here's what changed my mind about market timing: When I compared my "smart" timing moves to boring, consistent monthly investments, the consistent approach won almost every time.
Why DCA Works So Well with SCHD
Volatility Protection
You automatically buy more shares when SCHD is cheap, fewer when expensive.
Emotional Discipline
Removes the stress and second-guessing that destroys timing strategies.
Compound Benefits
Earlier purchases start paying dividends immediately, which can be reinvested.
Real DCA Results
Key insight: This investor never worried about timing, never lost sleep over market movements, and still built substantial wealth.
Market Timing vs Buy-and-Hold Calculator
Strategy Comparison Results
Select your investment strategy and parameters to see how different approaches might have performed historically with SCHD.
The Psychology of Timing: Why We Get It Wrong
The biggest enemy of successful SCHD timing isn't the market – it's our own psychology. Let me share what I've learned about the mental traps that sabotage timing strategies.
Common Psychological Traps
Fear of Missing Out (FOMO)
When SCHD is rising, we panic and buy at peaks. I did this in 2021 and learned a costly lesson.
Analysis Paralysis
Overanalyzing charts and waiting for "perfect" conditions. Meanwhile, dividend payments and growth pass us by.
Confirmation Bias
We seek information that confirms our timing decisions, ignoring contrary evidence.
Hindsight Bias
"I should have bought in March 2020" – we remember the obvious opportunities but forget the uncertainty.
The Behavioral Solution
My "Anti-Psychology" Rules
The "Sleep Test"
The best investment timing strategy is the one that lets you sleep peacefully at night. For most of us, that's consistent, automated investing – not trying to outsmart the market.
A Practical Approach for Real Investors
After years of testing different approaches, here's the system I use now – and recommend to others who want to optimize timing without losing their sanity.
70% Automated
Set up automatic monthly investments. This is your foundation – consistent, emotion-free investing.
20% Opportunistic
Keep cash ready for major market drops. When SCHD falls 15%+, deploy this money.
10% Experimental
Try different timing strategies with small amounts. Learn without risking your financial future.
My Personal SCHD Timing Framework
Monthly Actions
- Automatic $1,000 SCHD purchase (1st of month)
- Check SCHD's yield vs historical average
- If yield >4.5%, invest opportunistic funds
Crisis Actions
- Market down 10%+ = Double monthly investment
- Bad headlines everywhere = Extra $500 investment
- SCHD yield >5% = Deploy all opportunistic funds
When NOT to Buy SCHD
Sometimes the best timing decision is knowing when to pause. Here are the rare situations where I'd recommend avoiding SCHD purchases.
Market Conditions to Avoid
Extreme Euphoria
When everyone thinks stocks only go up and dividend yields are near historical lows.
Signal: SCHD yield below 3.0%
Major Interest Rate Spikes
When rates rise rapidly, dividend stocks often underperform temporarily.
Signal: Fed raising rates aggressively
Personal Financial Stress
When you need the money for emergencies or debt.
Rule: Never invest what you can't afford to lose
Better Opportunities
High-Yield Savings >5%
Rare periods when safe alternatives offer competitive yields.
Strategy: Keep some cash earning risk-free returns
Major Life Changes
Job changes, home purchases, or family additions coming up.
Strategy: Pause investing until stability returns
Better Dividend Opportunities
Very rare occasions when similar quality ETFs offer significantly higher yields.
Caution: This is extremely rare with SCHD's quality
The 90/10 Rule
In my experience, 90% of the time the answer is "just buy SCHD." The remaining 10% – extreme market conditions or personal financial stress – is when patience pays off. Don't let the perfect become the enemy of the good.
Frequently Asked Questions
Best Entry Point Analysis Calculator
Entry Strategy Recommendation
Enter your investment parameters to receive a personalized entry strategy recommendation based on current market conditions and historical patterns.
The Bottom Line on SCHD Timing
After analyzing thousands of data points and learning from my own timing successes and failures, here's what matters most: Starting is more important than timing. Consistency beats perfection. And SCHD's quality and dividend growth provide a margin of safety that forgives imperfect timing.