"The Redditor's concern, right or wrong, stems from the sheer volume of posts they have seen lately talking about other Redditors selling SCHD in favor of growth positions. As a result, they believe that we might be at or near the top of a serious tech bubble. They are padding their argument with the idea that Tesla has a price-to-earnings (P/E) ratio of 250 and Palantir has a P/E of 591, and both are still gaining."
"Their concern is based on the reality that these 50+ PE ratios can't and won't hold forever, especially when you consider that the S&P 500's historical average is only 17. This individual is also concerned about the Dow Jones index being based on companies that make physical products (and not tech names) that mostly sell services. While that isn't entirely true, they believe that tech isn't as exposed to tariffs at the moment, so these few tech stocks are really what's driving market growth,"
"No matter where you look on the internet, there is always going to be someone who tells you that they know more than you do about investing. It's almost as if it's a rite of passage to try and be the biggest know-it-all in the world about whether or not you should buy, hold or sell an equity. In many ways and for various reasons, this is what the Redditor is trying to convey in their post on r/dividends."
Many Redditors reported selling SCHD to reallocate into growth stocks. Some observers interpret the shift as a potential indicator of an overheated tech sector and a looming market correction. High price-to-earnings ratios on certain tech names are cited as evidence, with Tesla around 250 P/E and Palantir near 591 P/E compared with the S&P 500 historical average near 17. Concerns include perceptions of Dow Jones composition and the idea that a handful of large tech stocks are disproportionately driving current market gains. Potential policy changes, such as tariff reversals, could trigger a significant rotation in market leadership.
Read at 24/7 Wall St.
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