Filed Under (Business) by on 28-06-2009
You must really look at the activities you like to do and find a business that allows you to do them. For instance some people want customers to come to them. A retail store may work well for them. On the other hand some owners would loose their minds staying in a store all day; perhaps something with outside sales will work for them.
Are you a people person, a thinker, a leader, or a salesperson? Do you like steady hours, flexibility etc. How much money do you have to purchase with? How much money must you make every week? Remember the process of buying the business is not the same as running one. Do everything possible to make sure you buy one you will love running.
Make sure you know how to look for a business. Don’t just go to one source but really check multiple reliable sources to find the business that is right for you. Systematize your notes so you know what you looked at. Make sure you compare your strengths and weaknesses with the day-to-day tasks of running the business.
Floating rate loan funds are mutual funds that invest in adjustable-rate commercial loans. These are a bit like adjustable-rate mortgages, but the loans are issued to large corporations in need of short-term financing. They are unique in that the yields on these loans, also called “senior secured” or “bank” loans, adjust periodically to mirror changes in market interest rates. As rates rise, so do the coupon payments on these loans. This helps bond investors in two ways: (1) it provides them more income as rates rise, and (2) it keeps the principal value of these loans stable, so they don’t suffer the same deterioration that afflicts most bond investments when rates increase.
Investors need to be careful, though. Most floating rate loans are made to below-investment-grade companies. While there are provisions in these loans to help ease the pain in case of a default, investors should still look for funds that have a broadly diversified portfolio and a good track record for avoiding troubled companies.
Another option for bond investors is to shift their holdings from intermediate and long-term bond funds into short-term bond funds (those with average maturities between 1 and 3 years). While prices of short-term bond funds do fall when interest rates rise, they do not fall as fast or as far as their longer-term cousins. And historically, the decline in value of these short-term bond funds is more than offset by their yields, which gradually increase as rates climb.
