As stock prices have fallen dramatically this year, one critical barometer of the market has been rising. Dividend yields are at historic highs -- only two stocks in the S&P 500 showed yields above 6% near the height of last year's rally; that number now stands at 48. And individual stocks and funds have seen dramatic gains in their yields -- one year ago the Alpine Total Dynamic Dividend Fund (NYSE: AOD) yielded 10.8%; today it sits at 27.2%.

There aren't many truly ironclad rules on Wall Street, but the relationship between yield and price is unbreakable. They always move in opposite directions. When price falls, yield rises -- always, period, amen.

For instance, if a $100 stock pays a $5 dividend, then its owner receives a nice 5% yield. But if that same stock drops to $50, its dividend yield rises to 10%. And right now, there are literally hundreds of stocks in this exact situation. The Dow and S&P are each off about -35% on the year, and dozens of dividend-paying companies have seen panicky traders push their shares to fire-sale prices -- lifting yields to historic marks. Smart investors are locking in those high yields right now.

How to Calculate Your Dividend Yield
Let's review what it means to lock in a yield, because most investors assume that yields change. And, indeed, they do. They rise every time a firm's share price falls, and vice versa. But the price you paid for a stock doesn't move -- it's locked in. Because of this, you can use depressed share prices to lock in some mouth-watering yields.

Take our previous example -- a $50 stock that is yielding 10% based on a $5 dividend. Even though shareholders all receive the same payments each year, the investor who bought their shares at $100 is earning only 5% on what they invested -- and the investor who bought at $75 is seeing a 6.7% return on their money. But those who bought at $50 can continue enjoying 10% yields on their original investment -- even as the share price rises, decreasing the yield.

While this concept is simple to follow, what most often gets overlooked is how large an impact it can have on your portfolio. Let's examine the performance of a company with a long history of rewarding shareholders with a rich dividend stream: Altria (NYSE: MO), the company many investors knew for years as Philip Morris.

Here are its actual dividend payouts from 2000 through the end of 2006:
 

As you can see, investors have been showered with rising dividends for years. But those smart enough to buy in when the stock was trading at an abnormally low share price were able to lock in a higher yield -- a yield they're still enjoying today.

Let's assume you bought 1,000 shares of MO on Feb. 11, 2000 -- a roughly five-year low. At a price of $19.06 a share, dividends totaling $2.02 in 2000 worked out to a 10.6% dividend yield.

In 2001, MO paid $2.22 in dividends, and investors who bought at $19 earned 11.6% in dividends on their investment. The next year, 2002 saw a 12.8% dividend payout, which rose to 13.9% in 2003. By the end of 2006, the shares were yielding 17.4% based on your original purchase price. An investor who bought at $19.06 would have collected a total $17.94 in dividends, a +94.1% return based on dividends alone.

Now that's a great investment... but not everyone fared so well. Why? Because as dividends rose, so did the share price. When prices go up, yield goes down. So investors who bought at a higher share price locked themselves in to a lower yield.

Our table below shows how dramatic a difference buying near a high can make on your yields compared to using a market sell-off to lock in above-average yields. Investors who bought MO just over a year later -- well after the shares had rebounded from their low -- locked themselves into significantly lower yields.

In other words, even though the investor who bought at the low in 2000 is getting the exact same dividend payment per share as the investor who bought at the high in 2002, they are earning drastically different yields on their investments because they locked in at different prices.

Again, the lower the buy price, the higher the yield. The higher the buy price, the lower the yield. In the end, that added up to a huge difference: Investors who bought at $19 in 2000 were earning 17.4% in 2006, while investors who bought in 2002 earned only 5.6%.

That's the awesome power of locking in a yield for the long term at depressed shares prices. And that's where we are in the current market. Many are fearful of this volatile market -- and caution is warranted. But If you want to earn a rich yield and collect a positively gargantuan capital gain, the time to buy is now.

These Bargains Won't Last
Not to be overly dramatic, but you're running out of time. The markets won't stay at these depressed levels for long -- there's just too much value to be had at too cheap a price. Investors have tons of cash on the sidelines, and many are waiting for Wall Street's dark mood to lift. It won't take long for some of  these yield opportunities to disappear.

Nick Lanyi, editor of High-Yield International, has been scouring the globe for its best dividend payers. His premium newsletter is full of yields that have been juiced thanks to the global sell-off. While everyone else is stymied by fear, Nick's readers are taking advantage of this rare buying opportunity. Some checks have already been cut. Follow this link to make sure your name is on one of them.