Millionaires usually emerge from bear markets richer.

On 9 July, I wrote a piece on how fear of a collapse of the eurozone must be so strong that investors are paying Germany to borrow money from them.

Today, I read in The Business Times that "Millionaires added US stocks more than any other asset in the latest year as average investors fled to bonds, according to a survey by Fidelity Investments."

The survey involved 1,020 households with at least US$1 million in investable assets, excluding retirement savings and property, for the 12 months ended March 2012:

20% bought individual domestic equities.
13% added to the cash positions.
11% bought into ETFs.
10% added to bonds or stock funds.

Average age of respondents: 61 years old.
Average investable assets: US$ 3.05 million per respondent.

"They're probably ahead of the average investor in how they view opportunities," Bob Oros, EVP in Fidelity's wealth services group, said of millionaires. "They're becoming less and less risk averse."

Millionaires' outlook for the future of the economy was the most positive it has been since the annual study started in 2006.

We know that millionaires usually emerge from a bear market even richer than before. Now, do we know why?

Related posts:
1. Borrow money and be paid to do so.
2. Perpetual bonds: Good or bad?
3. Should we be staying invested or in cash?

Sabana REIT: 2Q 2012 DPU 2.27c.

When people asked me whether they should invest in AIMS AMP Capital Industrial REIT or Sabana REIT recently, I asked them what are they after? If they are after a higher yield in the immediate future, Sabana REIT is the obvious choice.

Sabana REIT has declared a DPU of 2.27c, just 0.01c higher than in the last quarter. Annualised, this gives us 9.08c. Buying units of the REIT at $1.00 a piece would give us a distribution yield of 9.08%. Sabana REIT is probably the only one in the S-REIT universe now that is offering a distribution yield in excess of 9%.

Gearing: 34.1%

NAV/unit: $1.04

Interest cover ratio: 5.6x

Occupancy: 98.4% to 100%.
(Total occupancy rate: 99.9%)

Remaining land leases (average): 39.7 years.

The REIT's management should be working on leases expiring in 2013 soon, if they have not started already. Given that 47.4% (down from 49.4% in January 2012) of leases expire in 2013, this is a top priority, in my opinion. Hopefully, we would then see positive rental reversions which would, in turn, improve DPUs.

They have signed a new 10+5 year master lease for 1 Tuas Avenue 4 which would now expire on 31 March 2022. I would like to see more of such effort to reduce lease expiry concentration in 2013 and, to a certain extent, 2015.

In the meantime, the REIT could probably make another two or three acquisitions if it gears up to 40%. This would be the fastest way to improve DPU.

The REIT will go XD on 25 July and its income distribution is payable on 29 August.

See presentation slides: here.

Related post:
Sabana REIT: 1Q 2012 DPU 2.26c.