Author: Joanne Musa

Your first step to building a profitable tax lien or tax deed portfolio was deciding why you want to invest. This will determine how you are going to invest. Will you invest through a self-directed IRA or with after tax funds; in your own name or through an entity; in tax liens, tax deeds, or redeemable tax deeds? Once you determine how you are going invest, the next step is to decide where you will invest. What state and county are you going to invest in?

Once your done with steps one and two, the why and the how, it’s time to concentrate on the what. The third step to building your profitable tax lien portfolio is finding the tax sale information. You need to find out when and where the tax sale is held and obtain a list of properties that are in the sale. For most areas this step will be easy, you just need to know where to go and who to contact to get this information. Sometimes you will have to pay for it and sometimes you will be able to get it free of charge.

Each state is a little different in regard to how the tax sales are conducted and who is responsible for them. In some states you’ll have to contact the county tax collector, in others it could be the county treasurer, or the county sheriff, or there could be a separate county office just for this purpose. I recommend that you first contact the county tax collector, or whoever is responsible for the tax sale and ask for the tax sale information. Ask for a list of tax sale properties. Usually you can get this list for free and sometimes it may eve be available online.

All tax sale lists are not created equal. Some lists will have all the information that you need to do your due diligence (the next step in the process of building your profitable tax lien portfolio) and some will only list the tax number, block and lot, owner of record, and amount due for each property in the sale. The physical address of the property may not be included. If that is the case, you have two choices, you can buy a detailed tax sale list that includes all of the information that you need, or you can look the information up yourself, which can be a very tedious process.

Very large detailed tax sale lists can be quite expensive, even a few hundred dollars, so if there are a lot of properties in the tax sale you would be better off to limit the amount of properties that you are interested in and look up the information that you need yourself. You can limit yourself to a particular area, or to only certain types of properties to make the next step in the process a little easier. If the list is not that large and costly, you may want to buy the tax sale list from a tax sale list provider. It will save you lots of time in doing your due diligence.

Author: Arindam Chattopadhyay

Fixed Income portfolio can suffer sudden loss due to by inflation or currency depreciation. If you have large investment in this asset class, a portion of the interest earned can be invested in out-of-the-money gold calls. This is a cheap way to protect your asset.

How to protect diversified portfolio?

You can diversify by owning bonds as well as stock; owning small, midsized and large companies; and by owning different funds, some of which some are value oriented, while others are growth oriented. More sophisticated approach will be to use Commodity fund and Hedge funds. Commodity index fund is a good alternative asset class to reduce over all risk of a diversified portfolio.

You can follow any one of the following option to protect down slide of your investment
a. Purchasing out-of-the-money puts and calls, for very small sums of money, and be content when they expire worthless.
b. You can also buy future but it involves more money.
c. If you have a home loan with a variable-rate mortgage loan, that can be protected by buying out-of-the-money bond puts.
d. A retired couple with a large municipal bond portfolio might consider a combination of owning some precious metal warehouse receipts and at the same time using a small portion of their interest stream to purchase out-of-the-money gold calls.
e. You can sell US dollar index or buy Euro. You can involve in Forex trading in small amount.
f. Considering strong bull market, you can go long term long on commodity and roll over your contract every month end.

How to protect bond portfolio against dip in currency
If dollar price decreases, price of municipal bond decreases but commodity price will increases.

In this case exercise option to buy commodity and sell USD.

How to hedge Large cap stock against fall of USD.

Any increase in US dollar, reduces stock price and commodity price.
The options purchased should behave in the opposite manner of the basic portfolio and should not be purchased for speculative gain through trend watching, market timing, or chart pattern recognition.

While classic diversification attempts to reduce the overall volatility of the portfolio, real diversification provides customized insurance against a drop in value of the primary assets . The asset class used as a hedge must have an inverse relationship or correlation with the asset being hedged. Simply put, as the price of one goes up, the price of the other should go down.
Your investment philosophy is to own a small part of the company for at least 20 years. This ownership mentality will really give you money in the long run.

In the high bull market do partial profit book regularly. If market sentiment is strong bull, use Future and options strategies.
If market sentiment is strong bear buy put option. Use 5% of your money in Future and Options trading.
You should use Future and Option for portfolio management of your stock portfolio. Option trading basically used to hedge your asset and also make some speculative gain.

In strong bear market, your blue chip companies can generate good income if you use covered call option regularly. It’s not difficult to get 40% p.a. ROI by writing Covered Call Option.

In short, the stock market is a voting machine and much of the time it is voting based on investors’ fear or greed, not on their rational assessments of value. Stock prices can swing widely in the short-term but they eventually converge to their intrinsic value over the long-term.