Per Jenna Ross of Visual Capitalist,
Few investors could have predicted that a viral outbreak would end the longest-running bull market in U.S. history. Now, the COVID-19 pandemic has pushed stocks far into bear market territory. From its peak on February 19th, the S&P 500 has fallen almost 30%.
While this volatility can cause investors to panic, it’s helpful to keep a long-term perspective. Black swan events, which are defined as rare and unexpected events with severe consequences, have come and gone throughout history.
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying that presumed black swans did not exist – a saying that became reinterpreted to teach a different lesson after black swans were discovered in the wild.
Jenna Ross, Black Swan Events: Short-term Crisis, Long-term Opportunity, Visual Capitalist, March 20, 2020, https://www.visualcapitalist.com/black-swan-events-short-term-crisis-long-term-opportunity/
Wikipedia, Black Swan Theory, https://en.wikipedia.org/wiki/Black_swan_theory.