There are some strategies that can help you make the most of the SHD stock split boost and your wealth. You might have heard that SHD, or the Schwab US Dividend Equity ETF, is about to undergo a three-for-one stock split. This means that for

every share you own, you'll soon have three, and each share will cost about a third of what it does now. But why does that matter for your investments? In this video, we'll break down three simple strategies you can use to make the most of the stock split and maximize your

wealth, whether you're a seasoned investor or just getting started. These strategies will help you understand how to take full advantage of what's coming. We'll cover everything from basic investment techniques to advanced option strategies, so stick around to see how you can make SHD work harder for

you. Chapter one: Understanding SHD and the stock split. Before we dive into the strategies, let's take a moment to understand SHD and what this stock split actually means. SHD is one of the most popular dividend-focused ETFs out there, especially among those looking for

steady income and growth. It's managed by Charles Schwab and has a solid reputation for providing reliable dividends with an impressive track record of increasing its payouts over the years. So what exactly is a 3-for-1 stock split? It's simple: After the split,

for every one share you currently own, you'll now have three. The price per share will be reduced by a third, but don't worry, your total investment value stays the same. Essentially, it just makes each share more affordable. In the case of SHD, this split is set to take effect

on October 11, 2024, when shares will start trading at the new price. This is part of Schwab's plan to split 20 of their ETFs, making them more accessible to smaller investors by lowering the price per share. Schwab hopes to attract

a broader range of investors and boost the liquidity of these ETFs. It's a big move, and it's happening soon. Chapter 2: Strategy One: Leverage Affordability and Dollar Cost Averaging. Let's kick things off with a strategy that's perfect for everyone, especially if you're looking to

build wealth steadily over time. Dollar cost averaging, or DCA for short, with the upcoming split, SD's share will drop to around $28 per share, making it much more accessible. This is great news if you're someone who wants to invest regularly but may not have a lot of money to put

in all at once. Here's how dollar cost averaging works: Instead of trying to time the market, you invest a fixed amount of money into SHD on a regular schedule, like monthly or quarterly. By doing this, you buy more shares when the price is low and fewer shares when the

price is high. Over time, this helps average out the cost of your investment, reducing the impact of market ups and downs. And since SHD is a well-established dividend ETF, you're not only building up shares but also enjoying the benefit of its consistent dividend payouts. Why is

this especially useful now? Well, thanks to the split, the lower share price means you can buy more shares with the same amount of money. So, if you're investing $100 every month, you'll now be able to buy roughly three shares instead of just one. This strategy also keeps investing

simple and manage, no need to worry about trying to buy at the perfect time. Another bonus of DCA is that it's great for anyone who's just starting out. You don't have to have a ton of money to get in the game by consistently adding to your SHD holdings.

You're setting yourself up for long-term growth without the stress of market timing. Over the years, this approach can help you steadily build wealth, especially as SHD continues to grow and pay dividends. Chapter 3: Strategy Two - Options Trading: Enhancing Income through the

wheel strategy. Now let's get into a strategy for those of you looking to boost your income with a bit more sophistication: options trading using the wheel strategy. This approach is popular for generating regular income, and an SHD stock split will make it even more accessible after the

split. The lower share price means it'll take less capital to start trading options on SHD, making this an exciting opportunity for investors. So what exactly is the wheel strategy? In simple terms, it's a method that involves selling put options, and if those options

get assigned, then selling covered call options. Here's how it works: First, you sell a cash-secured put option on SHD. This means you're agreeing to buy 100 shares of SHD if the price drops below a certain limit. If SHD's price stays above

that level, you keep the premium from selling the option. If it goes below, you buy the shares and then you own them at a discount. Once you own the shares, you move to the next part of the wheel strategy: selling covered calls. Here, you're agreeing to sell your shares at a

set price. If the price of SHD goes up and reaches that price, you sell the shares and keep the premium. If not, you still hold the shares and can continue to collect dividends while waiting to sell another covered call. The beauty of this strategy post-split is that the

cost of entry is significantly lower with SHD trading around $28 per share after the split. Buying 100 shares for options trading will require less than $3,000 compared to the current $88,000. Plus, this makes it easier for investors to get started and utilize the wheel

strategy even with a smaller budget. Additionally, the split is less likely to increase liquidity in the options market. More investors will be able to participate, which typically means narrower spreads and potentially lower trading costs. This strategy can be particularly effective with a stable ETF like SHD as

its steady dividend and growth history provide a solid foundation for income generation. If you're looking for a way to maximize income through options, the wheel strategy is worth considering. Chapter 4: Strategy Three: Capitalize on Dividend Growth and Reinvestment. Our final strategy is all about capitalizing on SHD's solid dividend

growth and reinvesting those dividends for compounded wealth over time. SHD is known for its reliable dividend payouts, which have grown consistently year after year. After the stock split, the dividends will be adjusted down to match the new share price, but don't worry, your overall

dividend income stays the same because you'll own more shares. Let's break it down. Before the split, each share of SHD might pay out about $3 in annual dividends. After the three-for-one split, you'll have three times the shares, each

paying about $1 annually, so even though the per share dividend is lower, your total payout remains the same. Now imagine reinvesting those dividends back into SHD. By reinvesting, you're buying more shares each time a dividend is paid, and over the years this process

can significantly boost your wealth. Thanks to compounding, dividend reinvestment is especially powerful with SHD because it's a dividend growth ETF. This means the fund has a track record of not only paying dividends, but also increasing them over time. By reinvesting, you're essentially using

your dividends to buy even more shares, which will in turn generate more dividends in the future. It's like a snowball effect; your income grows larger the longer you stick with it. And with a new, lower share price post-split, you'll be able to reinvest dividends more

frequently, even with smaller payouts. This makes it easier to accumulate shares steadily and take advantage of SHD's strong performance and growth. If you're focused on long-term wealth building, reinvesting dividends in a reliable ETF like SHD is a great way to

grow your investment. It's simple, effective, and best of all, it requires minimal effort on your part once you've set it up. Chapter five: Comparing pre-split versus post-split investment approaches. Now you might be wondering whether it's best to invest in SHD

before or after the split. The truth is, it won't make a huge difference in terms of long-term value. Whether you buy now or wait until after the split, your overall investment value remains the same. However, post-split, SHD's lower share price might attract more investors, which

could increase demand and improve liquidity. If affordability and flexibility are your priorities, waiting until after the split might be a good choice. But in the end, the timing isn't as crucial as sticking to a solid long-term investment plan. So there you have it: three strategies to

help you make the most of S&D's upcoming stock split. These strategies give you the tools to maximize your wealth with S&D. The split itself doesn't create extra value, but it does open up new opportunities. So stay informed, keep your goals in mind, and let these strategies

guide you toward growing your portfolio. Thanks for watching and don't forget to share your thoughts in the comments below. Until next time, happy investing.

3 Simple SCHD Stock Split Strategies to Maximize Your Wealth

3 Simple SCHD Stock Split Strategies to Maximize Your Wealth

Scripts