Finding Security in Offshore Funds

When it comes to deciding on secure investments, offshore funds, located outside of one’s national boundaries, can serve as valuable opportunities. Offshore funds are a great mechanism to take advantage of some tax benefits. Moreover, offshore funds and trusts are often less restricted by National financial parameters and guidelines.

Offshore mutual funds offer lower costs and operating fees because of their reduced regulation requirements. According to Investopedia, offshore funds offer eligible investors significant tax benefits compared to funds in many high-tax jurisdictions. For example, US domestic mutual funds are a tax disadvantage for international investors from outside the U.S. because dividends from these funds are typically subject to the high tax rates the U.S. has for non-citizens. Rates can be as high as 30% on certain types of income paid out by the US domiciled funds.

Offshore funds are often managed in a similar way as domestic funds are. Many of these offshore tax-haven locations are considered investor friendly and a thorough investigation will discover which are regarded as financially secure.

Although many offshore funds are quite legitimate, there are many that are run as unknown entities and should not be trusted. Never invest in an offshore account located outside of established financial centers. Such offerings may be more susceptible to scams because of relaxed regulations in some offshore locations.

Offshore trusts are similar to offshore funds. An offshore trust is very comparable to a traditional trust in that it involves a binding legal agreement (or trust deed) between the trustee, settler, and beneficiary. Trusts are designed to protect assets from undesired parties. Benefits and distributions are made to the stated beneficiaries according to the trust deed.

It’s true that offshore trusts are generally formed in low-taxation areas such as Switzerland or the Cayman Islands, but decreased taxation is not the only characteristic of a good offshore trust or offshore fund. Many countries simply are home to renowned, experienced trust companies that offer extreme confidentiality and substantial asset shields. Offshore jurisdictions frequently modify their laws to make their jurisdiction attractive to potential investors. An ideal trust location should display proven successful management of trusts.

Our experts at Paradigm Capital Management frequently stress that offshore trusts and funds should be incorporated into every investor’s asset allocation model. Forming an offshore portfolio can provide protection from untoward scrutiny, litigation, and civil strife. It should be apparent that while the cost of the formation and maintenance of a trust fund may be considered high, the establishment of an offshore trust will provide for sound peace-of-mind for those looking to protect their wealth and provide for their children in the long- term.

International banking systems exist which allow you to maintain accounts in different currencies, eliminating the risk of foreign exchange for transactions involving offshore funds. Such institutions may offer the ability to manage an account from anywhere in the world, and they will offer the ability to send funds across continents with no fees. They are not typically prone to interest rate restrictions and reserve requirements common to domestic lenders.

For more info you can consult with us at Paradigm Capital Management. With a long history of small-cap investing, Paradigm Capital Management employs a disciplined, bottom-up approach with an emphasis on fundamental analysis and extensive management contact.

Our strategies are available through separately managed accounts, mutual funds, and onshore and offshore long/short funds—all of which draw upon the same fundamental research and investment process that have been the key drivers behind our significant, long-term outperformance.

To learn more about how Paradigm Capital Management’s capabilities align with your long-term goals, please contact us at (518) 431-3500


A Look into Dividend Small Cap Stocks

If you are looking for suitable ventures to invest your hard earned money in but cannot find any, it may be worthwhile exploring dividend small cap stocks. These can provide big financial returns and are considered a good investment because of their ability to expand.

Interestingly, a majority of investors still prefer large cap stocks and are not aware of the benefits of investing in small cap stocks, which are liable to pay better dividends. Let’s take a brief look at what dividend and small cap stocks are first of all.


Dividend stocks, as the term suggests, are the stocks that ensure massive windfalls at the end of each year and still retain their fundamental sale and purchase value. The investors secure financial benefits with the growth of the company. Thanks to internet expansion, these are now easy to find and are the best source of a passive income.


This holds true for many rich and influential people, who prefer investing in dividend stocks. Meanwhile, small cap stocks are stocks of those companies that are growing and have a small market capitalization. They should also show the promise of further growth.


Investing in dividend small cap stocks can be beneficial for the shareholders. This is because they promise rich returns despite the risks involved. Let’s take a look at the advantages of investing in these stocks.


  1. There is always the possibility of earning rich dividends when the company grows. While investing in an upcoming business has risks of its own, you never know how far the company might go. The more it grows, the better the profits you are likely to earn.
  2. Undervalued stocks have more potential to grow, hence the possibility of improved financial gains.
  3. A company that is new in the market attracts little attention, so its prices remain fairly stable. It is more likely to double its sales at some point than the bigger players. That means more profit for the investors.
  4. Dividend small cap stocks have lower volatility.


As you can see there are some clear benefits to investing in small cap stocks. You now need to know how to find them and choose the ones you want to invest in. If you have access to a computer and a steady internet connection, this might not be a difficult job as the internet has a host of websites dealing with the stock market. This is where you can find the stocks listed with a word of advice from experts on which ones are the best to pick up at a particular point in time.


For more info consult with Paradigm Capital Management a small cap company. With a long history of small cap investing and micro cap funds, Paradigm Capital Management employs a disciplined, bottom-up approach with an emphasis on fundamental analysis and extensive management contact. Our three decades of experience provide an exceptional level of insight that is reflected in our high-conviction portfolios.


We have the experts when it comes to Small Cap Investment and we can definitely assist you with your financial goal, contact us at (518) 431-3500

Also read: Technical Analysis of Small-Cap Stocks – Is it Worthwhile

Penny Stocks – Are They Worth the Trouble?

Penny stocks, which are also referred to as micro-cap stocks, are defined by a number of factors, which include their price, as well as their market capitalization. Most investors will seek a stock that is undervalued and inexpensive relative to its price earnings potential, and micro-cap stocks have many such stocks with prices that are under a dollar. Additionally, these up and coming companies typically have market capitalization of less than 50 million dollars. This wonderful area of the equity market can provide investors the opportunity to achieve returns on their capital of 200% or 300% within a very short time frame, with risks that are commensurate with the returns. Therefore, an investor needs to understand how to trade these gems when the opportunity arises.

Micro-cap stocks are traded on a number of exchanges, which include the OTC-BB (Over-the-Counter Bulletin Board), the NASDAQ, as well as on Pink Sheets (.pk). The exchange traded micro-cap stocks are companies that are regulated by the SEC (Securities Exchange Commission) and are obligated to provide a complete and comprehensive financial overview of the company’s performance to its shareholders in the form of quarterly financial statements and an Annual Report that conforms to SEC reporting guidelines.

Over-the-Counter stocks include any regulated, publicly traded stock that does not trade on a national exchange. The strict requirements imposed on public companies are advantageous to most investors. Instead of having to guess the condition of a financial corporation, all the investor needs to do is look up their latest financial statement (10Q). The difference between the OTC-BB market and the national exchanges is that OTC companies do not have the same listing standards, such as minimum price for listings. To the diligent or well informed stock trader, this opens up opportunities to locate these undervalued companies. But there are pitfalls and mine fields.

Pink sheet stocks are an area of the equity markets where the companies that are traded are unregulated and do not have to conform to the same types of financial reporting as exchange traded or OTC-BB equities. These companies do not have to file an annual report or quarterly financial statements. For numerous reasons, the companies in this area of the market have decided that they would rather not report their specific financial results to a regulated group, but that does not mean an investor cannot find out how well these companies are performing or what’s in their pipeline. An investor can call a company directly or subscribe to a reputable penny stock research firm to find out the financials of a pink sheet traded company.

All types of micro-cap stocks are traded through market makers, who are professional traders that make prices in which they will purchase and sell a stock. Market makers exist in all size stocks, but their importance is more prominent when the volume of a stock is relatively low. The price at which a market maker will purchase and sell a stock will be different and this difference is called the bid (the price where a market maker will buy a stock) and the offer (the price where a market maker will sell a stock) spread. In many cases the spread between the bid and offer will be tight, but there will also be many cases where a bid/offer spread will be wide (large). For some penny stocks, a bid offer could be 50% to 100% of the value of the stock. For example, if a market maker quoted a stock with a bid at 10 cents and an offer at 30 cents, the spread of 20 cents is 66% of the price in which an investor could purchase the stock. To eventually sell the stock, the bid would have to move up 200% for the investor to break even. This is a key pitfall for an investor to avoid when trading penny stocks.

As indicated, one way investors and day traders can assist themselves in the process of learning how to trade penny stocks is to research and become associated with a capable micro-cap research firm. Not only will this type of company provide an investor with robust companies that are interesting and undervalued, but they will also steer investors away from companies that have wide bid offer spreads. Research firms can provide the financials of pink sheet and OTC-BB firms which can be difficult to find, excellent analytical tools, and provide a framework for the investment process.

Generally, before making a recommendation of a hot stock pick, they will have also dug into the company’s “back story”, and will publish that news to their subscribers, often on an exclusive basis. This early access and heavy lifting associated with researching of a micro-cap stock can take an enormous amount of time if performed without the services of a diligent research firm with top analysts crunching the data. In fact, the best research firms will send reaal time email and SMS instant messaging alerts that will notify their subscribers of companies that are fundamentally or technically undervalued which have reached very attractive entry points. A specialist firm will also refer a reputable broker that can execute trades for you in a fair and efficient manner.

Penny stocks can provide investors with unlimited returns and numerous challenges, and the process can be extremely rewarding if due diligence in the process is performed properly.

With a long history of small-cap investing, Paradigm Capital Management is a trusted leader in small cap investing. The Paradigm Micro-Cap Fund (PVIVX) offers focused, carefully selected exposure to the smallest segment of the U.S. equity market. These small companies are often overlooked by Wall Street and other mutual funds, yet they offer high return potential. It is an asset class that demands specialized expertise, and the managers of the Paradigm Micro-Cap Fund have been dedicated to this subset of the market since 1972.


To learn more about how Paradigm Capital Management’s capabilities align with your long-term goals, please contact at (518) 431-3500