How can the teachings of The Intelligent Investor help in reducing investment risk?

'The Intelligent Investor' challenges existing investment paradigms by advocating for a conservative and long-term approach to investing. Instead of chasing high returns through risky growth stocks, the book suggests investing in large, established companies with a history of profitability and stable financial conditions. This approach reduces risk and protects capital, generating sustainable returns over the long run.

The Intelligent Investor presents several surprising insights. One of them is the idea that investors should not aim for better than average returns by investing in growth stocks, as they carry too much risk due to the high speculative element in their prices. Instead, they should focus on large, established companies with a history of profitable operations, stable financial conditions, and reasonable profit/earnings ratio. This approach helps to reduce risk, protect capital from loss, and generate sustainable returns over the long run.