See how regular investments in SCHD can build wealth and generate growing dividend income over time
Starting amount for your SCHD investment
SCHD's historical average return is approximately 10.47% (since inception)
Current SCHD yield as of 2025
SCHD's 5-year dividend growth average is 11.44%
Final Portfolio Value
$224,208
Total Contributions
$70,000
Investment Growth
$86,859
Total Dividends Earned
$67,349
First Year
$508
Final Year
$25,804
Results based on monthly compounding
Past performance does not guarantee future results
Dollar Cost Averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the share price. This approach offers several benefits:
SCHD's characteristics make it particularly well-suited for a dollar cost averaging strategy:
Select a regular investment frequency – monthly is most common, but weekly, bi-weekly, or quarterly can work depending on your cash flow. The key is consistency.
Choose a contribution amount you can comfortably maintain long-term. Consistency is more important than the amount. Consider increasing your contributions annually by 3-5%.
Set up automatic transfers and investments through your brokerage. This removes emotion from the process and ensures you invest consistently regardless of market conditions.
Turn on DRIP (Dividend Reinvestment Plan) to automatically reinvest all dividends, creating an additional layer of dollar cost averaging through quarterly dividend payments.
Commit to your DCA strategy during all market conditions. Resist the urge to time the market, especially during downturns. Market corrections provide opportunities to acquire more shares at lower prices.
Annually review your DCA strategy to ensure it still aligns with your financial goals. Consider increasing your contribution amount as your income grows.
"The beauty of dollar cost averaging with SCHD is that it combines the power of consistent investing with the compounding effect of growing dividend payments. Over time, these twin engines of growth can create substantial wealth regardless of short-term market fluctuations."
| Scenario | Initial Investment | Monthly Contribution | Time Horizon | Projected Results |
|---|---|---|---|---|
| Early Career Starter | $2,000 | $500 | 30 years | ~$1.2M portfolio generating ~$47,000 annual dividends |
| Mid-Career Accelerator | $25,000 | $1,000 | 15 years | ~$604K portfolio generating ~$23,500 annual dividends |
| Pre-Retirement Push | $50,000 | $1,500 | 10 years | ~$431K portfolio generating ~$16,800 annual dividends |
| Inheritance Investment | $100,000 | $500 | 20 years | ~$817K portfolio generating ~$31,900 annual dividends |
| College Fund Builder | $10,000 | $300 | 18 years | ~$248K portfolio for education expenses |
Projections based on 10.5% annual return and 11.4% dividend growth rate. Past performance does not guarantee future results.
While studies suggest that lump-sum investing outperforms DCA about two-thirds of the time (when sufficient capital is available upfront), DCA offers significant behavioral and psychological benefits. For SCHD specifically, DCA works well because it:
The ideal approach depends on your risk tolerance, available capital, and investment timeline. Many investors use a hybrid approach: invest a portion as a lump sum, then dollar-cost average the remainder.
Market volatility is actually beneficial for a DCA strategy with SCHD. During market declines, your fixed dollar investment buys more shares at lower prices. When combined with SCHD's dividend payments (which tend to be more stable than share prices), market volatility creates opportunities to accumulate more shares that will generate dividend income for years to come.
Additionally, SCHD typically exhibits less volatility than the broader market due to its focus on quality dividend-paying companies with strong balance sheets and consistent earnings.
One of the primary benefits of DCA is simplicity and removing emotion from investing. For most investors, maintaining a consistent contribution schedule regardless of market conditions is the recommended approach.
That said, some investors choose to slightly increase their contributions during significant market downturns (sometimes called "strategic DCA"). This approach requires discipline to avoid inadvertently timing the market. For most investors, setting up automatic investments and letting the strategy run without interference produces the best long-term results.
Tax considerations depend on the account type where you implement your SCHD DCA strategy:
For taxable accounts, maintaining records of all purchases (including DRIP transactions) is important for calculating cost basis when shares are eventually sold. Many brokerages now track this automatically.
There's no definitive endpoint for a DCA strategy with SCHD. Many investors continue throughout their working years and into retirement. However, some common transition points include:
Even after stopping regular contributions, many investors maintain their dividend reinvestment (DRIP) to continue the compounding effect of SCHD's growing dividend payments.
Calculate how dividend reinvestment can accelerate your wealth through the snowball effect.
Compare the performance of SCHD against the broader market index.
See how your effective yield grows over time with dividend increases.