Risk and Reward Misconceptions

The belief that higher risk investments guarantee higher rewards is a common misconception among investors. Research indicates that low volatility stocks often outperform their high-risk counterparts, challenging the traditional high-risk, high-reward narrative. A study conducted from 1968 to 2008 revealed that low-risk stocks can yield better returns, prompting a reevaluation of investment strategies. This insight encourages individuals to reassess their understanding of risk and focus on sound investment practices rather than seeking out the riskiest options.