Sacred Cow

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Historical Returns

    The past performance of a security or index. Analysts review ...
  2. Retirement

    When a person chooses to leave the workforce. The concept of ...
  3. Investment

    An asset or item that is purchased with the hope that it will ...
  4. Risk

    The chance that an investment's actual return will be different ...
  5. Average Return

    The simple mathematical average of a series of returns generated ...
  6. Premium to Surplus Ratio

    Net premiums written divided by policyholders’ surplus. The premium ...
Related Articles
  1. Insurance

    Top 10 Life Insurance Myths

    The most difficult aspect of this complex product is determining how much coverage you need and why.
  2. Investing Basics

    The Five Biggest Stock Market Myths

    Stocks that go down must come up, right? Wrong. We bust this myth and four other common market misconceptions.
  3. Budgeting

    Debunking 10 Budget Myths

    Don't let these excuses prevent you from reaching your financial goals.
  4. Investing Basics

    Is Stock Picking A Myth?

    Find out if mutual fund managers can successfully pick stocks or if you're better off with an index fund.
  5. Retirement

    10 Bank-Breaking Money Myths

    Just because a belief is common, doesn't mean that it's true. Here we separate fact from fiction.
  6. Budgeting

    Dispelling 5 Myths About Financial Planners

    Raise your returns or lower your losses; these often misunderstood specialists can help guide you.
  7. Investing Basics

    The Top Sites For The Latest Stock Market News

    News drives the markets for short term price movements. Which websites offer timely, accurate and reliable access to news for trading and investments?
  8. Economics

    How A Limited Government Affects A Country's Finances

    Countries with limited governments have fewer laws about what individuals and businesses can and can’t do. What's the net result?
  9. Investing Basics

    How Does Goodwill Affect Financial Statements?

    Goodwill is a bit of a paradox--intangible, yet it is recorded as an asset on the purchasing company's balance sheet.
  10. Investing Basics

    Using Normal Distribution Formula To Optimize Your Portfolio

    Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center