Potentially Better yield than FD - would you take it??

I have taken more prudent approach in 2019 in view of the higher uncertainty on US China trade war, Hong Kong protest, anticipated economic slowdown, bull run for more than 10 years in US. I have stayed between 50 to 60% invested through out the year and allocated more towards dividend stocks including S-Reits while maintaining a high cash level.
Yes, there is always opportunity cost in holding cash, especially when there were opportunities to buy good stocks at dirt cheap but I did not act on it. I missed the plantation stocks rebound though I kept an close eye on a few counters. My only consolation, I managed to catch SOP but have cashed out too early.

Moving into 2020, I probably would stay prudent too but will definitely act if opportunities to buy good stocks at dirt cheap arise. So, I noted there is opportunity to buy into BIMB-W** now that will give 10 to 15% return in approximately  9 months later (highly likely, as always, nothing is guaranteed).  That is a much better yield than all the dividend stocks I am currently holding ( yes, there is opportunity cost here as there may be capital gain for my dividend stocks - again, no guarantee it will be capital gain, it could be loss!!).
If I compare with the yield from Fixed Deposit (cash reserve), 10 to 15% return in 9 months is 3 to 5 times more. Of course, there is a potential opportunity cost if market crash and I can allocate the FD to buy good stocks that are selling cheap instead. For me, the highly likely scenario with 10 to 15% return is just too hard to ignore. What about you??


Hope this provide you with an alternative to your FD in bank too. Happy New Year and happy investing.



** Under the Proposed Restructuring of BIMB, all outstanding warrants shall be bought by company at 26 sen. Should the Proposed Restructuring fail and warrants remain listed, the 10 to 15% return will not materialise. Market price then may be higher or lower. Do take note this is warrant, expiring in Dec 2023.