TSX:8058 17 January 2026

June 29, 2026, 8:04 PM EDT. The so-called 'volatility anomaly' pushes back against the efficient market hypothesis, which holds that stock prices reflect all available information and risk drives returns. Research from David C. Blitz and Pim van Vliet finds that low volatility stocks tend to outperform their riskier counterparts-counter to what efficiency theory would predict. That could mean markets are pricing risky stocks too high and safer ones too low, raising the chance of a stock market bubble. Behavioral finance points to things like overconfidence and herd behavior that create short-term inefficiencies. While many academics stick to index investing, professional managers still try to take advantage of anomalies like this. The volatility anomaly keeps doubts about market efficiency alive and points to patterns that might be an early sign of a correction.