"The stock market will offer the best return at the end of 2024"

Recorded by Andrei Iacomi
English Section / 9 mai

"The stock market will offer the best return at the end of 2024"

Versiunea în limba română

(Interview with Andrei Sota, founder of Signal Sigma)

"There is no better time than the present to become a market participant"

"The main unrealistic expectation of beginners is that you can secure an active and recurring income from trading"

The stock market will offer the best return at the end of this year, believes Andrei Sota, the founder of the financial research platform Signal Sigma, who, however, emphasizes that a correctly constructed portfolio must have, in addition to stocks and bonds, gold or commodities.

In his opinion, the lack of capital and knowledge are the main reasons why our country is on the last places in Europe in terms of investments in financial instruments. "The majority of Romanians often prefer to allocate their available capital in investments on which they have a perception of safety, namely real estate", says Andrei Sota.

Reporter: What is Signal Sigma and what does it offer subscribers?

Andrei Sota: Signal Sigma is a financial research platform dedicated to instruments traded on public markets. Our specialty is creating investment strategies and systems for the American stock market, through quantitative analysis and machine learning processes.

The main product of the platform starts from the three automated investment strategies. These are model portfolios that an investor can follow or draw inspiration from. They are designed to offer varying degrees of risk, depending on one's appetite. The annual return varies from 7% to 20%. This means that by following our strategies, an investor can double his capital in five to ten years, suffering only the losses he can afford according to his risk profile.

We also provide daily, weekly and quarterly reports on the most relevant market trends.

Reporter: What is the profile of the customers/subscribers you have?

Andrei Sota: We have both professional and amateur customers (retail). Most are located in the United States, including Romanians who moved there. However, we also have clients from Great Britain, Saudi Arabia and Romania. Among local clients, we are proud of two special institutions that use our platform - Emergent Investment Fund and Tradeville.

However, not everyone has an open trading account. To my surprise, one of our clients became a subscriber solely for the purpose of learning and further planning their investments.

Reporter: Statistics show that Romania ranks last in Europe in terms of direct or indirect investments (through funds) in financial instruments. What do you think are the main causes and how can the situation be improved?

Andrei Sota: The main cause is the lack of capital. You can't start investing if you don't have anything.

Most Romanians, even if they have some savings, does not mean that they can afford to be too aggressive with them in terms of risk exposure. That's why they often prefer to allocate their available capital in investments that they have a perception of safety, namely real estate.

The second cause is lack of knowledge. For a novice, it can be very intimidating to start investing in the stock market. There are a lot of barriers to entry that can discourage you: the broker's technology platform, the wide range of tools, the opinions of various analysts.

Reporter: How do you see the macroeconomic environment this year and what investment opportunities do you think exist in the given context?

Andrei Sota: The main problem the market is facing at the moment is the inflation that still seems to persist, despite the efforts of the central banks. The much-anticipated recession failed to materialize in 2023 and has started to become a stale theme, although some risks do exist.

So, it depends on which camp you place yourself. Do you think inflation will go down and there won't be a recession? You buy shares. Do you think there will be a recession? You buy bonds. Do you think inflation will rise? You buy gold, commodities and shares of energy companies.

Of course, a correctly composed portfolio has to some extent all the elements described above. In my opinion, the stock market will provide the best return at the end of 2024.

Reporter: What are the most important preconceptions and/or unrealistic expectations that first-time investors have?

Andrei Sota: I think the main unrealistic expectation is that you can secure an active and recurring income from trading. Of course there is an extremely small percentage of the population that can achieve this, but for the overwhelming majority of people, the financial market represents a source of passive income in the medium and long term. Changing your current job to become a trader is extremely difficult.

Reporter: What advice do you have for someone who has never invested in financial instruments?

Andrei Sota: Let's start investing now, with a small amount of money. There is no better time than the present to become a market participant. Real-life experience is as important as theory in this field. As you gain experience and knowledge, you also gain confidence and can gradually invest more. Another tip is to find a mentor you resonate with or a group of investors to trade with. The market is a social construct after all and the counterparty to a transaction is another human being. So it is very important not to invest in isolation and solitary, but as part of a community. In this way, you will also gain experience from others, you will be able to share the emotions that come with the wins and losses, and the whole process will bring you more satisfaction.

Reporter: Thank you!