Anatomy of a Great Trade: Deep Value – SCHD

by | Mar 15, 2024

Deep Value trades don’t always mean we have to bite the bullet and buy beaten down companies that we may not be familiar with.

Deep Value also works for conservative, buy-and-hold long-term investors.

Remember, what are Buffett’s rules for big long-term gains?

Buy a great company at a good price.

Or, put another way, we could be a bunch of great companies at a good price.

And we can do that via an ETF.

Further, we could use that methodology on a dividend-paying ETF. Now we are hopefully getting price appreciation but also a dividend payment.

And, if we pick a good ETF, that dividend payment will also grow over time.

SCHD fits that profile.

Back in 2020, everything fell when the pandemic hit. SCHD did, too.

Here’s the chart:

In March 2020, SCHD moved down to the lower Band of our 800 length Bollinger Band™. That’s rare and was an amazing opportunity.

Buying at that point around $42.50 would have seen us get what we wanted.

We would have gotten great price appreciation and great, growing dividend payments all along the way.

Deep Value is a way to catch big winners.

But it’s also a way to get great entry points on long-term holdings.

Happy trading,

— Scott Welsh

WRITTEN BY<br>Scott Welsh

Scott Welsh

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