Abstract
Content and Product Director O ne of the enduring characteristics of investing is that many of its most widely accepted principles eventually become viewed as unquestioned truths.Conventional wisdom develops over time through experience, repetition, and broad acceptance until assumptions are often treated as facts.Yet the history of finance repeatedly reminds us that progress frequently begins by challenging those assumptions.Ideas once considered beyond dispute are reexamined, tested against new evidence, and, in some cases, shown to be incomplete or simply incorrect.This special issue of The Journal of Investing is devoted to myth busting.The articles collected here examine a number of commonly held beliefs within investment management and ask a simple but important question: What if conventional wisdom is wrong?Some myths are challenged directly through empirical evidence, whereas others are reconsidered through new theoretical perspectives or alternative ways of thinking about investment decisions.Although readers may not agree with every conclusion, each article encourages the kind of critical thinking that advances both academic research and professional practice.We begin with the provocative commentary "Myth: You Need an Investment Consultant to Succeed" by Brian A. Schroeder, who questions the widely held assumption that institutional investors require investment consultants to achieve successful outcomes.Drawing on decades of industry experience and supported by academic evidence, he examines consultant incentives, organizational complexity, and the transparency of reported results, ultimately arguing for a fresh assessment of the traditional consulting model.Next, in "Behind the Benchmark: Dissecting Active Bond Fund Performance," Vikas Jain and Yingjin Gan investigate whether active fixed-income managers truly generate alpha.By developing technical benchmarks that more accurately capture underlying credit and curve exposures, they find that much of the apparent outperformance attributed to manager skill can instead be explained by systematic risk exposures.Their findings challenge the long-standing belief that active bond management consistently delivers value beyond passive alternatives.In "Measuring the Riskiness of a Stock Investment," Gary Smith revisits one of the most fundamental concepts in investment theory: risk.Contrasting John Burr Williams's dividend-based view of investment risk with the modern emphasis on return volatility, he demonstrates that these competing perspectives can produce very different assessments of the riskiness of individual stocks, encouraging readers to reconsider how risk should be defined and measured.In the fourth article, "Yes, You Should Gamble (sometimes)," Franklin J. Parker challenges another deeply rooted assumption-that gambling is inherently irrational.Using goals-based portfolio theory, he argues that under certain circumstances gambling can represent a rational strategy for achieving specific objectives while also identifying the conditions under which such behavior crosses the line into irrationality.Turning to digital assets, in "Are Cryptocurrencies Diversifying Assets?," Ralph Goldsticker examines the increasingly common assertion that cryptocurrencies provide meaningful portfolio diversification.Through an analysis of portfolio volatility
