High Dividend Stocks - Safeguarding against the loss of purchasing power
Why are you contemplating investing in high dividend stocks? I consider high dividend stocks those yielding over 6%. One reason could be that you want your dividends to outpace so-called "inflation".What metric best measures the loss of your money's purchasing power at the hands of the Federal Reserve? If you ask people at work and on the street how much prices go per year on average, then you are likely to get the answer 3-4% per year from 80% of them.As horrendous as annual consumer price increases of 3-4% are...the story doesn't end there. You've had this nagging feeling your whole adult life that the prices you pay for shelter, food, energy, healthcare, utilities, and entertainment add up to a whole lot more that 3-4%. Well, you were right and a gentleman named John Williams over at www.shadowstats.com can confirm you hunches with actual numbers (http://www.shadowstats.com/alternate_data/inflation-charts). You see, the consumer price index (CPI) is a collossal lie to put off the day of reckoning for Social Security, Medicare, and a myriad of pensions. These ponzi schemes and underfunded pensions go broke faster when consumer prices rise. Past presidential administrations convinced the Bureau of Labor Statistics to modify the methods of computing the CPI in order to kick the bankrupcy can beyond their presidency. You can read about how they changed the computations at ShadowStats.com. The bottom line is that actual real life consumer price increases are several percentage points above what the government reports. Right now, according to ShadowStats.com the rate of consumer price increases of a representative sample of goods is about 8%.
Now do you understand why I think you need to investing in high dividend stocks yielding more than 6% with earning power and strong balance sheets. The earning power and strong balance sheets ensure the dividend and provides an opportunity for capital appreciation in the market price in your stock. There will be many choice stocks yielding over 6% when this bear market rally finally fizziles. Be patient, save your capital, and get ready to buy when everyone else is fearful (think of the fear below the March 2009 lows).

