Black Swan events: How do they affect the markets and your portfolio?
Genuine Impact
You're only seeing 5% of the charts we do. Check out all of them in our newsletter ??
By 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.