Robert Cable worked as an investment advisor for over forty years, and has written many articles about investing that have appeared in financial publications in both Canada and the United States. In his book Inevitable Wealth,[1] he summarized data from several sources that analyzed the performance of the 250 companies that were included in the S&P/TSX Composite Index during a time interval of twenty-eight years, from 1986 to 2014.
 

Figure 1 was adapted from Figure 7-1 in Cable's book. As indicated on the figure, Cable found that those companies included in the Index and had a record of paying growing dividends, achieved compound annual growth rates of their market prices that were almost twice as high as the growth rate of the Index itself. As shown in the figure, Cable’s research also found that the subset of companies from the Index that did not pay dividends grew at a rate of 1% per year over the same period, a rate that was less than the rate of inflation.
 

It is apparent from this research that if you invest in stable companies that have a consistent track record of growing dividends, you can create a portfolio that will generate a stable, reasonably predictable, annual dividend income that will

 increase with time. Most importantly, you can ignore the effects of fluctuating market prices since they have no effect on your annual dividend income.
 

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