Practical Applications of Debunking 7½ Myths of Investing

Abstract

In Debunking 7½ Myths of Investing from the June 2022, 30th anniversary special issue of The Journal of Investing, authors Laurence Siegel (of the CFA Research Foundation) and Stephen Sexauer (of the San Diego County Employees Retirement Association) explain that seven popularly held beliefs about investing are myths, while an eighth is part myth and part truth. The authors’ takeaway is that people will almost always seek to make a better life for themselves through innovation and building wealth, so investors should seek out and invest in innovative companies worldwide. Uncertainty about the future is a key driver that causes individuals to embrace false myths about investing. Some of the myths prey on individuals’ desire to find simple solutions to complex problems by offering a false sense of control over uncertainty.