Investing Dictionary
Risk

What is Black Swan?

A rare, unpredictable event that causes massive market disruption

Full Explanation

A black swan is an extreme, unexpected event nobody saw coming — like the 2008 financial crisis or COVID-19 crash. The name comes from the old assumption that black swans didn't exist.

Pro Tip

You can't predict black swans, but you can prepare: hold cash, diversify, don't use leverage.

Related Risk Terms

Drawdown

How much your investment dropped from its peak

Hedge

An investment that offsets losses in another

Leverage

Using borrowed money or financial instruments to amplify your investment

Margin

Borrowing money from your broker to buy more stocks

View all Risk terms →

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