The second group is the second largest group and they depend on acts of God and or Mother Nature (roofing, disaster recover, etc.). The housing and commercial infrastructure in our nation is aging and some of the more modern structures quality has not stood up to standards. A result is replacing roofs and pipes breaking. Certain areas of our country have gone from drought to flooding. Basements and houses have been flooded and need to be rebuilt. This industry has stayed stable through our Great Recession. However, the name Pure Natural Healing Review of the payer for these companies is not the owner of the property, but the insurance company. The risk to this group is the insurance pay-out amount and timely delivery.
These types of companies should remain stable over the next 3 years or as long as insurance companies remain financially healthy.The smallest of the three main small business types is the small business which depends on large mega-corporations (Fortune 500 companies). This group has not felt the effects of the Great Recession. In a matter of fact these companies have been growing at full throttle during the past few years since the mega-corporations have outsourced projects to them to save costs.
These companies should continue to grow over the next several years since the mega-corporation have lots of cast, clean balance sheets and are using this type of small business to save costs and to fill unique niches. Their biggest risk is for the mega-corporations to cut their budgets and to lengthen payment cycles.The warning signs: The first sign of the second wave is interest rates. The rhetoric, including the Federal Reserve Chairman and your evening news, say the economy is recovering, stabilizing and even growing. However, interest rates have continued to decline. The 2 year Treasury is only yielding 0.569% which is the lowest yield ever for this type of bond.
The 10 year Treasury has fallen from a 4% yield in April to a 3% yield in July 2010. The signs which state interest rates should be increasing include our population’s credit scores are at one of the lowest levels in history and the Federal Reserve and US Treasury have stopped purchasing mortgage securities in March 2010. If the economy was healing shouldn’t the interest rates be rising? One reason rates might have been lowered is to help banks make their financial positions appear healthier. Banks make loans at locked in interest rates and then record the loan as an asset on their books. When interest rates rise the loans with lower interest rates have a lower fair market value. However when interest rates decline the loans with higher interest rates are worth more!