153: Risk & Your Investments

Risk vs. Volatility: Why “More Risk = More Return” Can Mislead InvestorsJosh Sheluk and Colin White discuss how “risk and return” is widely marketed yet poorly understood, arguing that the industry often equates risk with volatility using measures like standard deviation, even though risk is subjective and tied to an investor’s goals. They outline different risks—volatility, permanent loss, inflation, liquidity, and behavioral risk—and stress that avoiding risk has costs, as seen in insurance and in giving up liquidity via products like long-term GICs or private investments. They challenge the simplistic pitch that more risk guarantees more return, noting examples where higher risk can have low expected returns (lotteries, casinos, zero-day options, concentrated positions, leveraged ETFs, and prediction markets). Their key point: define risk relative to objectives and time horizon, and be wary of sales-driven risk framing. Click here to view the episode transcript. (00:00) - Aug2026: The True Cost of Risk (00:12) - Podcast Intro (00:57) - Risk Return Myths (02:59) - Marketing Risk Reduction (05:27) - Volatility Versus Risk (06:56) - Goals Based Risk (12:30) - Liquidity And GICs (14:45) - Why Risk Pays (15:47) - When Risk Fails (19:11) - Stocks Versus Bonds (21:25) - Expected Versus Realized (25:12) - Managing Risk Tools (27:39) - Insurance And Cost (30:03) - Smart Versus Dumb Risks (32:31) - Leverage And Betting (36:54) - Final Takeaways (39:04) - Outro And Disclosures 00:00 The True Cost of Risk00:12 Podcast Intro00:12 Podcast Intro00:57 Risk Return Myths02:59 Marketing Risk Reduction05:27 Volatility Versus Risk06:56 Goals Based Risk12:30 Liquidity And GICs14:45 Why Risk Pays15:47 When Risk Fails19:11 Stocks Versus Bonds21:25 Expected Versus Realized25:12 Managing Risk Tools27:39 Insurance And Cost30:03 Smart Versus Dumb Risks32:31 Leverage And Betting36:54 Final Takeaways39:04 Outro And Disclosures