October is the month of financial education, a subject in which Italians seem not to be doing very well. According to research, in fact, only 30% of citizens in the country have an adequate level of education in the field of finance and economics.
The lack of knowledge, however, does not limit ambitions and there are many who choose to operate on the stock exchange, especially via the web, hoping for easy enrichment only to find themselves having to deal with the harsh reality: there is no sudden successful trader, indeed yes risks returning home with broken bones and an empty wallet. At a time when the Internet offers the possibility for everyone to access the markets and even operate from smartphones, it becomes essential to acquire at least the fundamentals of financial education.
Those foundations that we find in "I hope that the stock market goes up" (Ugo Mursia Editore, 2022, pp. 214), a text written jointly by the journalist Manuela Donghi , one of the best-known names in Italian economic-financial journalism, and by Enrico Gei , experienced trader. It is, in fact, an agile and fun handbook for getting closer to the financial markets and starting to operate with common sense. A handbook whose spirit is effectively summarized in the title. I hope that the stock market goes up deliberately refers to the famous I hope that I manage by Marcello D'Orta. And just as in that book a teacher had to deal with disorganization, little knowledge and children left on their own, even those involved in financial disclosure find themselves dealing with low literacy and above all with many clichés.
We ask Manuela Donghi how the idea for the book was born:
“The idea comes from messages that some of our followers have sent us over the last few years, messages that denote the lack of basic knowledge of economics and finance, so much so that it is absolutely inadvisable for them to operate on the stock market. You know the classic messages that make you smile but which, given the topic, and given the risk (of losing money) are definitely alarming? Here you are. Reading what these people wrote, we said to ourselves: why not start from the most frequent and common mistakes to explain the importance of financial education, so that the topic can be easily understood by everyone? ".
What are the most common doubts of the novice who wants to operate on the stock market?
“Those who approach the stock market unfortunately have few doubts and also very little knowledge. It lulls itself into the illusions of easy and fast wealth, which the web especially offers through the countless realities that today allow you to start doing transactions with real money in a few minutes, even from our smartphone. Doubts come after a very short time, often with the first operations closed at a loss. This is because we do not know the basic elements of mathematics, concepts of risk and financial leverage, the characteristics of all the assets that are going to be bought and sold, and so on ”.
What are the first tips to give to those who want to "debut" in stock market operations?
“Do not be misled by the 'sirens' of the many gurus of the sector, who promise amazing returns on social networks, but first of all study risk management to aim at protecting your capital (in jargon Money Management); a good rule of thumb is also to start operating with a "demo" account (virtual money) before putting your personal capital at risk. Many brokers allow you to open it completely for free ".
But really, as many think, is it so easy to make money with the stock market?
“Trading on the stock exchange (trading) is a real activity, and as such it must be managed. Each activity requires a period of training, mental discipline and of course a lot of passion; operating on the stock market without a minimum of study and without knowing how to manage one's emotions does not take you far. The stereotype that many films offer us about the stock market investor is that of the trader with a smoking cigar between his lips waving his arms nervously, giving orders left and right, screaming as if he were involved in a fight against the financial market. It is not so. The winning investor is rather a professional, and those who take their first steps can do so in a targeted and timely manner, without aiming to become a new Warren Buffett in a few days. I hope that the Stock Exchange is intended to facilitate access for everyone in the world of the Stock Exchange, it allows you to familiarize yourself with the great figures of the sector by describing their methods, and also offers a strategy for online trading. In short, the economy and finance are treated in an enjoyable way to juggle the many daily doubts ".
What should be done to improve the education and financial knowledge of Italians?
“It is necessary to realize that even if we do not like economics and finance or they bore us, sooner or later they will enter our daily life anyway. Think of a mortgage, car installments, a loan to start a business. Or the reading of payslips and bills, being able and knowing how to identify without problems what interests us, untangling ourselves between percentages, taxes, duties and so on.
In 2022 it is not acceptable to still be, as a country, in the last places for financial literacy (among the OECD countries); it is not educational that the school does not create a virtuous path, as well as credit institutions and companies in the sector, which should regularly organize seminars and meetings for customers. Finance and economics aren't just for industry experts - quite the opposite! And if there were a virtuous mechanism we would discover, we are sure, that the stock market and markets are anything but boring. They can even become a passion: this is what we have tried to convey through tasty anecdotes and simple examples, but really concrete for the reader ".