Dividends4Life: Fight Inflation With Dividend Stocks

Fight Inflation With Dividend Stocks

Posted by D4L | Wednesday, April 24, 2013 | | 0 comments »

Inflation is back in the news these days, thanks to President Obama's new budget proposal. That proposal adjusts the way inflation gets calculated in an attempt to raise tax revenue and stem the rise of Social Security spending by slowing the rise in the Consumer Price Index. No matter how it gets officially calculated, inflation is a real threat to your long-run ability to make ends meet. You need an effective way to fight that threat, especially now that potential changes to the official calculations are likely to slow the automatic benefits you're used to getting from the old method.

Owning the stocks of companies that pay dividends, have regularly increased their dividend payments, and look capable of continuing to raise their dividend payments just might be the best inflation fighter available to your arsenal. There are three key reasons to believe that successful companies can continue to raise their dividends at least as fast as inflation: accounting, real growth, and cost-cutting.

Source: Daily Finance

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