9 Black Swan Events that changed the Financial World

Unexpected Events in the Financial World between 1997–2016

All of us traders wish we had a magic ball in which we could see the future moves of the financial markets. Alas, that is not the case and we have to stick to our golden rules of due diligence, diversification, hedging, rebalancing, and continuous monitoring. More often than not most of the financial market moves are dictated by the greed & fear of the investors.

The inherent risks of investing in the financial markets can never be brought down to zero but they can be muted significantly by staying on top of things. Having said that, financial markets have a mind of their own & there would be times when a certain event or occurrence would take place that would be beyond anybody’s control — these are called Black Swan events which are random & unexpected in nature.

The term Black Swan was coined by Nassim Nicholas Taleb, a finance professor, writer, and former Wall Street Quant trader for 21 years, where he developed computer models for major financial institutions. The word Black Swan was popularized after the meltdown that resulted after the Financial crisis of 2008.

Setting 2008 as the base case example, Taleb argued that Black Swan events are almost impossible to predict yet have…