Sacred Cow

DEFINITION of 'Sacred Cow'

A firmly held mainstream belief that is considered to be true without independent verification. In finance, and in particular in investing, there are many sacred cows that are thought to be true, but are difficult to prove scientifically.

BREAKING DOWN 'Sacred Cow'

Some examples of sacred cows in finance include: one should save 10 to 15% of one's pay for retirement, or over the long run, investment returns are commensurate with risk. While these statements are widely accepted and infrequently argued against, not all are absolute truths. In the book "Killing Sacred Cows," the author identifies some myths and fallacies that have been accepted and preserved through the years in the financial world.

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