It’s an axiom of standard economics that you don’t get above average returns without taking above average risks. No risk, no reward. It’s an appealing idea, an extension of the entrepreneur's creed: you don't become successful without taking chances. It’s a meme that’s gone viral, an idea that permeates discussions about investment, drives hard headed analysis and leads us to celebrate the risk taking achievers in society.
And of course it’s a bucketload of hogwash. In fact, lower risk portfolios will tend to outperform higher risk ones. High risk stocks are dangerous rubbish, and offer not excess returns but excess losses. They’re a one way ticket to the seedy side of the market.