Are stocks really riskier than bonds?

Chulho Jung, William Shambora, Kyongwook Choi

Research output: Contribution to journalArticlepeer-review


Conventional wisdom holds that stocks are riskier than bonds; thus when the stock market becomes volatile, money flows from the stock market into the perceived safe haven of the bond market. In this article, we find that this notion is not necessarily accurate and might lead people to make incorrect investment decisions. In fact, intermediate- and long-term bonds are riskier than stocks when we measure risk by the coefficient of variation. We examine a case where an inaccurate perception regarding the relative riskiness of the two types of assets could play a part in what appears to be short-sighted and potentially costly behaviour of investors in financial markets.

Original languageEnglish
Pages (from-to)403-412
Number of pages10
JournalApplied Economics
Issue number4
StatePublished - Feb 2010


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