Young people want to get rich very quickly, and often want to take as much risk as possible. During a conference attended by managers of some investment funds at ASE, a student asked: “What capital do I need as a trader, what style of short trading and earn 5,000 to 10,000 lei per month?”.

What he asked is very risky and most people who do this lose all their money (see percentages below).

Short or short selling is done for a purely speculative purpose when the investor thinks that the price of the company will fall. No need to own shares. He borrows these securities and sells them on the market. After the price falls, they buy these securities at a lower price to return them to the broker, pocketing the difference.

Major shorting companies have investigative departments

Dragos Manolescu, CFA, Deputy CEO of OTP Asset Management, explained to him that the list of billionaires does not include people who got rich through shorting.

“You’ll never win in the long run by being short, and you’ll never get rich,” he told her.

He also said he was looking for a large company in the area. This company, he says, cuts companies.

“There is a department of detectives who travel and get information. Doing it as an independent investor (as an individual – no), without a device or a team, you will be part of the 70-80% who will lose all their money,” Manolescu explained.

Only 5-7% of shorts actually win

Rezvan Pashol, General Manager of SAI PATRIA Asset Management, noted that there are many ways to invest in the stock market, and there is also this get-rich-quick mirage.

“Can it be done? It is possible, but very difficult. Are the most useful strategies for the most people the most boring? We invest long-term in a basket of shares and so on. Of course, there are riskier strategies in which we invest, perhaps in derivatives. We have had many clients in this sector: .

I saw the statistics. For those types of investments where some people make money, 70% lost all their money. There are very high risks,” Pashol said.

So, he says, 70% lose all their money, and 20-25% leave it, that is, they fool themselves that they will find a winning strategy someday, but they don’t.

“5-7% earn, but it takes a lot of effort. Basically, it becomes work. It requires a lot of money and a high tolerance for risk,” he explained.

From 200,000 euros, you can earn 5,000 – 7,000 lei/month. It depends on the profitability, on how good a trader you are

Adrian Dudu, investment director of SAI Certinvest, explained to the student that he needs a lot of money to earn 5,000 – 10,000 lei per month.

“You have to think about what percentage of profit a strategy (like this ‘no’) can give you. We (nor investment funds) do not practice this. The best traders earn an average of about 50% per year. Start here. Look at the expenses this amount covers,” Dudu told him.

At a 20% return, he says, “you need somewhere around €200,000 to be independent and cover your annual expenses so that your capital is not affected and you have the flexibility to follow your strategy.”

For his part, Robert Burlan, CFA, head of investment management at Raiffeisen Asset Management believes that being short in the long term is betting against human progress, which doesn’t really make sense.