This week on Equity Mates

Hey there Equity Mate,

In the United States, there is a group of companies known as the Dividend Aristocrats.

To be a Dividend Aristocrat, you must:

• Be in the S&P 500 index (the 500 biggest US public companies)

• Have raised your dividend every year for the past 25 years

At the end of 2023, there were 67 companies that made the cut. A surprisingly high number.

We were disappointed that there isn’t a similar grouping for Australian companies. So we decided to make one. Introducing: Australia’s Dividend Darlings.

We went looking for companies listed on the ASX that had raised their dividend every year for the past 10 years. That gave us a list of 12:

Here’s the thing - this group of 12 companies have massively outperformed the overall Australian stock market over the past 10 years. We might be on to something here!

Tune in to today’s episode of Equity Mates Investing to hear us discuss Australia’s Dividend Darlings.

That’s not all we’re talking about this week on the podcasts.

Equity Mates Investing (Spotify | Apple | YouTube)

• Monday - Australia's Dividend Darlings, don't expect rate cuts soon & where we find information

• Tuesday - Live: Ask an Advisor with Glen Hare - Property, Superannuation, Brokers, Insurance & more

• Thursday - Channel 10’s controversial new (potential) owner & why companies die, but indexes are forever

• Friday - Uncovered: Hazer Group - A new way to create clean hydrogen

Get Started Investing (Spotify | Apple | YouTube)

• Tuesday - We’re tracking our spending - here’s what we found | PocketSmith

Your questions, answered

Liana asked via email:
I know I should invest but don’t have much time or knowledge. What’s a simple strategy to get started?

This week we’re going to answer Liana’s question, as we’ve written a book about it!

There are four simple steps you can take to start investing and building wealth.

1. Get paid

   1. When you get paid, take control of your finances, be aware of your spending, and be intentional with your money. You can’t grow wealth sitting money in your bank account. Save to invest, don’t save to save.

2. Automate your investing

   1. You want to automate your investing so you don’t have to think about it and can get on with life. You need to find an online broker that allows you to automate, and let’s you get out of your own way. Find one that allows you to invest small amounts of money and to do it cheaply.

3. Buy a bit of everything

   1. Choose and index ETF that invests at least 80% of your money in the stock market; passively tracks the overall stock market, rather than actively managing or tracking a particular sector or theme; has a global focus; does not invest in just one country; and has an annual management fee of less than 0.5% of what you invested.

4. Repeat each pay

   1. Repeat this process every time you’re paid, and you’ll be well on your way to to building wealth.

Four steps. Thirteen words. Less than one minute to set up.

For more detail on the process and examples of what to buy, you can buy Don’t Stress, Just Invest here.

If you have a question you’d like answered, hit us up at [email protected] 

This email is thanks to PocketSmith

Ren’s had a general frustration for a while with spend trackers - most have predefined categories, annoying automation that miscategorise transactions and no distinction between spending and investing.

So when we were asked to give PocketSmith a go, we were skeptical.

But we’ve been pleasantly surprised - finally a budget tool that has the flexibility and detail to give you true insight into your spending habits.

PocketSmith is Australia’s leading personal finance management tool. You can find out anything you need about your money: track progress, identify trends, spot issues, run reports, and plan ahead. You can also connect with Sharesight and your superannuation provider to track your overall net wealth.

If you’d like to manage your money like a pro, PocketSmith has a special deal for the Equity Mates community. Get 50% off your first two months of PocketSmith’s Foundation plan.

What we’ve been reading

BMW is succeeding with electric cars while rivals like Tesla struggle

The past quarter has been a tough one for all of the major electric vehicle manufacturers. The big 2 - Tesla and BYD - both saw deliveries of vehicles decline meaningfully.

However, it seems one company is bucking this trend: BMW.

While many of the pure-play electric vehicle companies saw sales decline, the German car maker reported 40% growth in their battery-powered vehicle sales.

Now we should be clear, BMW is coming off a much lower base. Tesla sold 387k cars in the quarter, BMW sold 83k. However, the fact that they were able to grow while the rest of the industry declined is meaningful.

This is part of the longer-term strategic threat for Tesla and BYD. They were able to build meaningful head starts in the race for EV market share as the traditional automakers hemmed and hawed over making the big investments to retool their assembly lines and potentially annoy their dealer networks.

The past 3 years has seen that indecision leave the majority of automakers, especially those based in Europe. Now many of the largest traditional automakers are all-in on electric vehicles and the race is on.

That is the biggest reason why Tesla has had to reduce prices and we would expect their margins to continue to decline. Not because the team at Tesla are doing anything wrong. But rather when you’ve got Mercedes, BMW and Volkswagen amongst many others entering your market, consumers suddenly have a lot more choice and become a lot more discerning on price.

All of these traditional automakers have a long way to go to catch Tesla’s market share. But on the other hand, Tesla has a long way to go to catch up to the traditional automakers scale. Let’s see who gets there first.

Arizona’s Split Reality: Ground zero for the rigged-election conspiracy, the border state could decide both the fate of the Senate and the presidency.

We are still 7 months out from the first votes being cast in the 2024 US Presidential Election but the race is truly on. And while in law the race is run across all 50 US states, in reality the race really comes down to a few battleground states:

• In the North-East: Pennsylvania, Michigan and Wisconsin

• In the South: North Carolina and Georgia

• In the South-West: Nevada and Arizona

Of these seven states, the one that may end up being the most instructive is Arizona. As a border state it is on the front-lines of the immigration debate, and last week it centered itself in the post-Roe v Wade abortion debate after reviving an 1864 law that bans almost all abortions. Add to that, for some reason, it is also right at the forefront of the 2020 election conspiracies.

Arizona is a state to watch.

This article takes us to Arizona and gives us insight into the two biggest decisions voters will be making in November. Firstly, the choice between Trump and Biden. And secondly, the choice for who to send to the US Senate - Ruben Gallego or Kari Lake.

Where Arizona goes so may the rest of the country. And with Republicans working to make immigration the most salient issue and Democrats trying to do the same with abortion - all eyes are on Arizona in the lead up to the 2024 Presidential election.