I have been ditching some of my low yield paper lately and shifting to high dividend stocks. The stocks I have been buying are cig companies – MO and RAI. The yields on these stocks are incredible right now, and are even more impressive with the recent drop in the stock prices of both (along with every other stock). Cig companies have extremely high margins, great ca$h flow, and MAN do they pay the dividends. Yes I realize those divs are taxed at normal income rates, but right now, what is your great idea on keeping up with inflation? Why own sovereign or corporate paper when cig companies are paying six or seven percent?
My odd theory is that if cig companies go under, the whole world will be at war for lack of smokes and we should all buy canned foods; everyone in Europe and Asia smokes, and tons of the young club going crowd also does here in the US as observed by highly detailed research by Carl and myself. Laugh if you want, I will collect my 7%.