Boring stocks work better than you think

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Collapse of FTX and other crypto exchanges teaches us an important lesson: high risk does not equal high reward

Labs earlier this year, as well as a long list of other crypto failures, all display a similar pattern. Stuff goes missing. Systems don’t work as planned. Small investors lose. Senior executives of the failed platform shrug .

This does not seen entirely rational. A highly volatile asset should be less attractive than a more stable one, everything else being equal. But volatility’s allure makes perfect sense psychologically. What do people want? Huge returns. When do they want them? Now. To sum up: You would have done very well over this period by investing in Canada’s most humdrum industries, especially those dominated by a handful of powerful companies catering to predictable everyday needs. You would have fallen far behind by taking a chance on riskier, more speculative, more early-stage ventures.

 

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