Equities Trade “DIRTY” – What that Means and Why it Matters

Overview: The purpose of this whitepaper is to educate readers about a flaw in our market structure, that causes income-producing securities to trade “Dirty." Dirty security pricing causes investors to pay inflated values for income-producing securities and then...

About FairShares®

FairShares’ patent portfolio provides the technology needed to fix a flaw in our market structure that causes ALL taxable investors to overpay for the income-producing securities they buy and then pay taxes they should not owe. In addition to allowing a security to price at its fair value, FairShares technology can identify and claim potential tax deductions, ensuring investors do not pay a penny more in taxes than they should. FairShares can save investors tens of billions annually in unneeded tax payments allowing them to keep more of what is rightfully theirs.

Global stock markets use a “last holder of record” payment system to distribute income from investment funds and individual securities to their shareholders. In a last holder of record system, a security’s unpaid dividends and capital gains are included in the price of the securities investors purchase up until the ex-dividend day. Dividends and capital gains are payable liabilities that are treated as “assets” for the entire payment period until they are correctly recognized as liabilities on the ex-dividend day, causing the security price to drop by the amount of the distribution paid. In essence, “Equities Trade Dirty.”

Therefore, investors are unknowingly buying two separate interests with each purchase they make:

  1. an interest in the security’s assets and
  2. a separate interest in the security’s dividends and capital gains.

The portion of an investor’s capital used to purchase an interest in the security’s dividends, and capital gains will be returned to the investor as “taxable income” when the distributions are paid, creating an instantaneous loss. The purchase of this secondary interest is called “buying a dividend or capital gain” and represents a “return of the investor’s capital.” A return of capital is a non-taxable event and should offset the investor’s gross income. For example, if investors are not claiming a return of capital for purchased securities, for every $1.00 used to purchase dividends and capital gains, the investor will receive ~$.60 in return when the distribution is paid. Consequently, investors suffer unnecessary losses due to excessive taxation – impairing their after-tax investment returns and long-term wealth accumulation.

We Allow Investors to Keep More of What They Earn

Additional Income Earned by Investors Who Leverage FairShares for 1 Security – Over 12 Months

 

Additional Income Generated

FairShares Higher Investment Returns

FairShares Delivers Higher Returns

Investors keep more of what they earn and retire with more money

Our Research and Analysis

These numbers quantify the potential tax savings realized by investors who use FairShares products to protect themselves from the flaws inherent in our market structure. We encourage you to watch our videos and read our Blogs, where you will find a library of information, all of which mathematically proves the benefits and value that FairShares delivers. As a primer, we encourage readers to start with a Blog titled “Equities Trade Dirty – What that Means and Why it Matters.” If you would like to understand the assumptions behind the numbers used in this example, please click HERE.

FairShares Offers 3 Core Products That Protect Investors and Allow Markets to Operate Fairly and Efficiently

#1 – We Lower an Investor’s Tax Burden by Accurately Reporting Investment Income

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We work directly with hedge funds, investment funds, family offices and HNW individuals to protect shareholders from excess taxation.

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If you have purchased more than $250,000 of any income producing security including Registered Investment Companies (ETF's, Mutual or Closed-End Funds etc.) or any stock that pays a dividend - we can save you money .

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This service will increase the after-tax returns shareholders realize - or you pay nothing. There is no risk.

#2 Structural Alpha for Any Security

Increase the investment returns and buying power of any income-producing security.

#3 Buy Fixed Income Without Needing to Pay Accrued Interest

FairShares’ patent portfolio can be leveraged to create an efficient fixed income market where buyers no longer need to pay accrued interest – allowing them to purchase more bonds and earn higher returns.

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Our intellectual property can be used to create a truly efficient market for fixed income.

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Buyers are able to buy more bonds because we eliminate the need to pay accrued interest in addition to the price of the bonds.

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Paying accrued interest is akin to offering a 0% interest bridge-loan to the seller.

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Earn higher returns by avoiding unnecessary costs and buying more bonds.

 Do You Want to Keep More of What you Earn and Make Markets Fair and Efficient?

If So, Enter Your Email Address Below To Become A Member Of The FairShares Community and #SupportCleanPricing

We can’t do this without your help. Financial innovation is notoriously slow, even when your money is on the line. By entering your email address below, FairShares will keep you up to speed on our progress, investment product launches, news, and how you can help us create an improved financial system. By coordinating our efforts and by working together as a Community – We will Make a Difference for our generation and generations to come! #BuyFairShares

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