Black Swan events: How do they affect the markets and your portfolio?

March 2, 2022
Amara Khan

What is a Black Swan event?

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.

History of Black Swan events

Source: Markets in a Minute, 2020

How they affect markets

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%.

But in the long-term...

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.

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