If you look around at some of the larger companies in the market, you will find that due to the recent turmoil in global markets, a lot of stocks are trading at such low prices that their dividend yield is extremely generous at the moment.

For instance, let's take a snapshot of some of the high yielding FTSE 100 companies at today's prices:

- Lloyds TSB – 8.1%
- Taylor Wimpey – 8.05%
- Royal Bank of Scotland – 7.91%
- Kingfisher – 7.75%
- Alliance and Leicester – 7.46%

However, before you rush in to snap up some of these high-yielding shares, you should remember that if we do get hit hard by a recession and these same companies suffer a dip in earnings in the next few years, then it's extremely likely that they will drop their dividend payouts.

So although they may look attractive now, if these companies cut their dividends in the near future then investors will no longer have a good reason to buy them and their share price could drop significantly.

Therefore in theory you could potentially lose out on two fronts – a reduced dividend and a loss in capital if the share price drops in the future.

This is the dilemma all high-yield investors are faced with at the moment. You have to ask yourself if a dividend cut is likely in the foreseeable future. If not, then yes there are some very attractive looking companies out there, particularly if you are planning to tuck them away for the long-term and pick up the dividends every year.