No risk, no reward? Not necessarily.

Friday’s Trash Crash was a reminder of one of the weirder and more-rewarding investing hacks: Stocks that help you sleep at night can also make you wealthier in the long run.

It seems like common sense that the greatest stock-market riches are reaped by those who throw caution to the wind by investing in the sort of companies avoided by widows and orphans—think Amazon, Netflix or Nvidia before they became blue-chips.

That common sense conclusion also forms the bedrock of academic-finance theory. The capital asset pricing model predicts a direct relationship between risk and reward.

But real world results show that often isn’t true. According to the findings of the low-volatility anomaly, dull stocks have beaten the market in the long run, and with less choppiness.

Just not during exuberant stretches like the six months between April’s Liberation Day low and last Thursday. A basket of meme stocks tracked by Goldman Sachs rallied 124% and one of speculative quantum-computing stocks gained 316%. On the opposite end of the performance spectrum, boring consumer-staples stocks rose just 1.3%.

During Friday’s market tumble, though, the first were last and the last first. Palantir, up 140% during the preceding stretch, retreated 7%. Rigetti Computing, which had surged 510%, fell by almost 7%. Meanwhile, Colgate-Palmolive, Altria, Campbell’s and General Mills shares all rose.

The S&P 500 High Beta Index, made up of the benchmark’s most-volatile stocks, had risen nearly 70% during the six-month span and fell almost 5% on Friday. The S&P 500 Low Volatility Index, the yin to high-beta’s yang, had barely managed a 7% gain during the preceding six months but rose slightly amid Friday’s carnage.

A single day’s reversal proves nothing, but the impressive long-term performance of those dull stocks might. And fewer white-knuckle moments also result in higher real-world returns since investors are less likely to get spooked into panic selling.

The problem is that low-volatility stocks tend to attract investors during downturns. High beta was a huge winner during the tech bubble and also has been during much of the retail investing boom since the pandemic.

One reason the raciest stocks get more appealing right when they get more expensive, like now, is that savers have an irrational preference for lottery tickets. Seeing huge payoffs, they overpay for the possibility of it happening again.

The Nobel Prize-winning economists who said decades ago that risk equals reward missed such psychological factors and also never accounted for trading frictions. Actively betting against stocks with nosebleed valuations like Rigetti or Palantir by selling them short is risky and expensive. That helps them keep rising for a surprisingly long time.

For investors wary of market froth who want to stay invested, this might be one of those times when boring is beautiful.

Talk is no longer cheap.

It isn’t just Truth Social posts about tariffs or testimony from Fed officials that send stocks careening lately. With valuations based as much on stories as hard numbers, the past year has seen more than its share of wild moves following commentary from executives.

Back in January, for example, Nvidia Chief Executive Jensen Huang said “very useful quantum computers” were more than 15 years away. Four red-hot stocks developing the technology each plunged by 35% or more. A month earlier, a comment by Google CEO Sundar Pichai about its own quantum-computing efforts, amplified by a social media "Wow" from Elon Musk, helped add a quarter of a trillion dollars to the company’s market value.

With third-quarter earnings season ramping up, be on the lookout for more strong reactions. One reason is that investors are in something of an information vacuum with most U.S. economic data on hold during the government shutdown. Another is that the largest single driver of domestic investment is now AI infrastructure spending, much of it by members of the so-called Magnificent Seven.

“Mag 7 earnings are basically macro events,” says Michael Metcalfe, head of macro strategy at investment firm State Street.

There’s also almost nowhere to go but down for investment funds’ bets on U.S. stocks—especially those AI-related ones: Their allocation to equities as a proportion of broader portfolios is at its highest since November 2007, just before a brutal bear market. That doesn’t mean one is imminent, though Metcalfe points out that State Street’s proprietary measure of risk appetite, which is based on flows, also is elevated.

Market ructions may well follow non-tech CEO comments too. The AI capital investment boom is raising lots of questions, but the companies spending all that money aren't short on cash. The same can’t necessarily be said for American households.

“The real economy’s strain is starting to show beneath the surface of market euphoria,” wrote Bob Elliott, CEO at Unlimited Funds. He cited weakness in sectors outside the tech world that traditionally have provided early warnings to investors like him.

Questions are swirling about the health of low-income consumers amid rising prices. Overdue subprime auto loans recently hit their highest level on record and almost a fifth of loan or lease payments now exceed $1,000 a month.

Retailers are a natural place to take consumers’ temperature, though some will be careful to keep their commentary about the impact of tariffs neutral to avoid the White House’s ire. Walmart was lambasted by President Trump in May when it said it would have to start passing on some price increases.

Smaller retailers might be less-guarded. So might executives at other businesses that can provide clues about Main Street’s health—sectors like travel, dining, entertainment or housing.

Now any day can be like “Jobs Friday.”