There have been many misconceptions regarding search engines ever since they came in to being. There are even more so now in the post Google panda and penguin world of search engines. When it comes to external links, there are 3 big misconceptions that exist.
Firstly, search engines will only penalize for linking to spammy websites and link farms. Therefore your must be careful not to link to these.
To avoid linking to spammy website and links farms you should avoid any form of automated link building that you have no control over. You must always check and see where and what you are linking to.
Search engines want you and your website to have good external links to relevant websites that are similar to your website because these will provide additional information about the topic you are writing about.
Secondly, it is true that by linking to another website that has a lower page rank than your website will add more credibility to that website. But Google doesn’t have a problem with that and there is no harm in doing this.
Here is what Google say about this.
"If you're linking to content you believe your users will enjoy, and then please don't worry about the site's perceived PageRank. As a webmaster you should be worried about losing credibility by linking to spammy sites. Otherwise, consider outbound links as a common sense way to provide more value to your users, not a complicated formula."
Finally, try to see external links as building relationships which can bring in more visits to your website. This practice is typical in blogs and the main social networks.
Bloggers frequently post external links all the time and so the more links they post, the more links they get in return.
To sum up the three misconceptions to do with external linking are in fact nothing to worry about. All that is required is just a bit of common sense when it comes to external linking, being careful about where and what you link to, and building relationships and or friends.