A Black Swan event is when something unpredictable happens, that can have significant consequences for investors. The recent conflict between Russia and Ukraine is just one example.
Source: Markets in a Minute, 2020
Black Swan events can affect the markets in a variety of ways. The invasion of Ukraine saw oil prices rise past $100/barrel, the Rouble drop to record lows and the FTSE 100 decreased by 2.7%.
If you look at the S&P 500’s performance in the long term, the market always recovers. Therefore, while these Black Swan events may appear to be panic-inducing for investors, it can be rewarding to look at things with a longer term perspective.