Bought YTLPOWR-WB - 21 January 2013

After over a week of monitoring YTLPower, I have decided it is time for an entry.  I just bought YTLPOWR-WB @ 0.435 since the warrant is going at almost 0 premium against its mother share.  Furthermore, the expiry date of the warrant is still over 5 years from now, November 2018.

There has been speculation in the market that YTL Corporation may privatize YTL Power.  If this rumour becomes true, we will see a rally in the YTLPower share, and thus its warrant as well.  The yield for the warrant would be higher and the capital needed for investment required is much lower.  The only downside from investing in the warrant is that one will not be receiving any dividend.

Which is better ? Fixed Deposit Interest vs Dividend Play in Stock Market

I believe majority of stock market investors would agree with me that one will earn more income by going the dividend play approach in Stock Market.  Possibly 6% or higher per annum in comparison to a mere 3% from FD interest.  Among the most popular high dividend yield stock are YTL Power, Public Bank and LPI.  Not only will the investor benefit from its high dividend yield, but also the stock appreciation in value.  On average, one can be assured of an average of 10% annual return, unless there is a global crisis or recession taking place during the year.  No doubt FD is almost risk-free, but some wisdom and patience, I feel taking a little more risk for an almost triple the returns is justifiable. 

As for myself, I love taking risks, which sometimes is not a good thing.  I hate to invest in something which does not seem to move for a long period of time.  I find them to be too boring for my taste.  A moderate risk is my type where I can feel the price movement in 3-6 months time frame for a 10% to 20% gain.  Let's hope my risk appetite pays off.