The oddest thing about my top Black Swan pick for 2018 is that you can actually do something about it–and here’s how

The oddest thing about my top Black Swan pick for 2018 is that you can actually do something about it–and here’s how

Black swan events in the financial markets are terrifying. By definition they’re extremely rare and extremely difficult to predict. Which wouldn’t be so scary if their effects weren’t so catastrophic. A 10% drop in the Standard & Poor’s 500 would certainly be painful–but it doesn’t rise to the category of a black swan. Neither does a 15% drop in the price of Bitcoins. Or a 20% drop in the price of Apple (AAPL). All these are relatively normal negative events. They’ve happened before. They happen relatively frequently. And in some cases–that of Bitcoin or the S&P 500, for example–they’re absolutely statistically normal for the market or a part of the market or a specific asset. No, the label “black swan’ is reserved for things like the 2008 global financial crisis that almost brought the world’s financial markets and its real economies to their knees. Or the Dot.com crash of 2000, which saw corporate giants such as Nortel Networks disappear from the economic landscape. Or the oil price crash of 2008 that saw oil soar to a high of $147 a barrel in July and then plunge to $32 by December. Given how devastating to a portfolio a black swan event can be, it seems, at first, surprising that most lists of “bad things that could happen in the year ahead” pretty much ignore this type of financial event.