Black Swans in Finance
The discovery of the Black Swan as a portrayal of extreme unpredictability and deviation from the norm in financial markets has led to the ubiquitous term “The Black Swan Theory”, developed by Nassim Nicholas Taleb. ‘Greed’ and ‘Fear’ are the two main elements driving the Black Swan economic events that we have witnessed throughout history.
When such catastrophic events occur, financial markets will not be spared from the whiplashing effects brought forth. In fact, markets are still feeling the financial and economic consequences from what happened during the Global Financial Crisis of 2008. Who really expected Lehman Brothers to close its doors when everyone believed that such corporations were “too big to fail”?
We all wish that somehow we could hold some predictive powers through statistical modelling or scientific computations, either to protect or exponentially grow our investment portfolios. But the truth is, our analysis and prognoses will render futile when Black Swan events occur.
The only way to mitigate any effect to our investments is to always stay informed and be wary of market movements. It is also wise to stick to the golden rules of investing: Diversification, Hedging, Rebalancing and Ongoing Monitoring.
Tracking the Black Swan
Let Call Levels take you through a series of 9 major Black Swan events that took place since the New Millennium to present day. Find out how you can keep abreast of the financial markets, and your investments afloat in light of such globally consequential awakenings.
While Black Swans are by definition unpredictable, being prepared doesn’t require you to watch the markets all the time.
Take the first step in alleviating the stress and worries that you might face as an investor with Call Levels.
Set reliable price alerts on-the-go, stay ahead of markets and be kept informed of your trades and investments even in the event of a Black Swan.
Do you think there may be other key financial or economic events that could rock the markets this year? Share your thoughts with us in the comments below.
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