Oil prices are plummeting, taking energy stocks down with them. Meanwhile, financial experts such as Harry Dent and Robert Shiller say the U.S. stock market is overdue for a correction. Shiller recently noted in Forbes that the market is 65 percent overvalued, mainly fueled by “irrational exuberance.”
Many investors today are yield-starved savers who are losing their earnings power to inflation, increased taxes, and persistent low interest rates.
As a result, they are being forced to take risks by investing against their better judgment into markets where they have little to no control, and for the majority, can’t afford to lose their money in another stock market crash as they did in 2001 and 2008.
A growing trend among those seeking to beat the bear is to channel investments into real estate, he says. Not the kind of venture that turned many into reluctant landlords during the housing bust, but another type called hard money lending.
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Here’s how it works. Investors act like a bank and make short-term loans to small businesses that buy and repair distressed properties, refinance them with conventional bank loans and repay the short-term loans at higher interest rates, generating more profitable returns for the original lenders.
I’ved identified four ways to get the most out of this lucrative investment. Shop local.