Today's we're wrapping up our discussion of some of the most commonly repeated, yet subtly dangerous, pieces of Wall Street advice.

We've already seen how doubling down can be Foolish (with the big "F"), how sticking to buying what you know can stick it to your portfolio, and how there's no one-size-fits-all formula for guaranteed market success. What other dangerous half-truths are out there? Let's take a look.

Low P/Es/valuations/prices mean low risk
I couldn't begin to count the number of books and magazine articles that basically center around the philosophy of picking low-P/E stocks. And there have been plenty of studies done that conclude that low-P/E stocks are generally prone to outperforming high-P/E stocks. But, as you may have guessed, if I'm talking about it here, it's not quite that simple.

Sometimes low valuations are an opportunity for a bargain. Sometimes they're a signal that troubles lie ahead. General Motors (NYSE:GM) had a single-digit P/E for quite some time ... before that P/E turned to "N/A" as the profits reversed into losses. Ditto Doral Financial (NYSE:DRL) -- low P/Es and a high reported growth rate didn't presage long-term opportunity, but rather reflected a riskier-than-average situation that ended up burning many investors.

On the flip side, stocks like POSCO (NYSE:PKX) and Chesapeake Energy (NYSE:CHK) have sometimes sported opportunistically low P/Es, as investors become too glum on the prospects for the cyclical industries in which they operate.

The key, then, is to dig underneath the surface and devote some time and brainpower to figuring out why a given stock looks mighty cheap. Maybe a stock is simply illiquid and unknown, maybe investors are overreacting to industrywide or company-specific news that really isn't as bad as they collectively think. Or maybe the low valuation is a warning flag that there are apt to be even bigger problems on the way.

And let's not forget the low-priced stock nonsense. It honestly baffles me that even in this day and age, there are still investors who think that a $4 stock is less risky than a $50 stock because the cheaper stock is "only $4." Ask a shareholder in PainCare (AMEX:PRZ) about the pain that sub-$5 stocks can inflict.

Then again, there are still people out there who think that stock splits and stock dividends are some sort of prize -- as though owning 200 shares of a $50 stock is any different than 100 shares of a $100 stock. So let's say it yet again -- not only can single-digit stocks drop by as great a percentage as large stocks, but many of these highly promotional little meatballs are likely to evaporate entirely.

Foreign stocks are too risky
This final subject is near and dear to my heart, given that I've spent a lot of time in the world of international investing and recently headed up the effort at our Around the World in 80 Minutes international stock report. While I haven't seen too many folks try and deny that overseas investing offers exceptional returns, you often hear far more about the supposed risks involved. Unfortunately, these warnings too often carry the decidedly Wise admonition that international investing just isn't for the little guy or gal.

Certainly there are some nuggets of truth here. You can see death-defying drops in not just one foreign market, but across entire regions, and many investors have vivid memories of the horrors of the Asian crisis of 1997 or the various Latin American debt crises. It's also true that corporate governance, shareholder rights, and access to information is not always up to U.S. standards, and that does constitute elevated risk relative to U.S. equities.

But the biggest risk with foreign stocks is that you'll get scared away from them and miss out on the benefits they have to offer. By sticking to sound Foolish stockpicking strategies and maintaining a measure of diversity, and you can reap solid returns that aren't always highly correlated with the U.S. market. In plain English, that means that investing abroad can let you "win" even when the U.S. market is soft, and it can actually reduce your overall portfolio risk.

Sure, investing 60% of your net worth in Eritrea is not a very Foolish idea, but foreign stocks like GlaxoSmithKline (NYSE:GSK), Sony (NYSE:SNE), and DeutscheTelecom (NYSE:DT) are a far different story. What's more, there's nothing set in stone that says you must pick individual foreign stocks to get the benefits of international investing. There are plenty of ETF's that let you invest in specific markets like Japan (iSharesMSCI Japan) or South Africa (iSharesMSCI South Africa) or groups of markets (like the iSharesMSCI Emerging Markets Index). And there are also numerous quality options in the mutual fund arena that can offer broad diversification benefits with one fairly easy-to-make decision.

The Foolish bottom line
There's no point in beating around the bush; investing is tough. And it isn't made any easier by well-intentioned advice that often breaks down or fails outright through overgeneralization.

For many years now, we at The Motley Fool have been in the business of encouraging people to think for themselves and challenge the assumptions and conclusions handed down from on high by Wall Street professionals. Not only is that smart advice for stock recommendations, I think it's exceptionally Foolish to follow that rule of thumb for any conventional investment Wisdom. There are many good pieces of advice out there. Just make sure you sift through the details yourself, to separate the stuff you can use from the stuff that will only cost you money in the long run.

Interested in other international investment opportunities? The Motley Fool's best analysts crossed the globe to come up with 12 stocks and two mutual funds ideas. Click here to find out where their best ideas reside by ordering your copy today.

For more myths debunked:

POSCO and GlaxoSmithKline are Motley Fool Income Investor recommendations.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares). The Fool has a disclosure policy.