Why doctors should ignore the financial planning textbooks

The financial planning textbooks tell us that there is a roughly direct relationship between risk and return. 

As expected return increases, so does risk. You must accept higher risk to get higher returns. 

This mantra permeates financial planning theory, and is parroted by the media, the Australian Securities and Investment Commission, and related bodies, such as the Financial Ombudsman Service. 

And it’s completely wrong. In fact it is toxically wrong and if followed, will lead to seriously second-best long-term outcomes.

Let me explain why.