Black swan events are extremely rare, unpredictable, and impactful events with severe consequences. Such events can cause catastrophic damage to an economy by adversely impacting financial markets and investments. A black-swan-event-triggered market crash negatively impacts the stock market, catching investors off guard.
It is believed that investors cannot predict a black swan event ahead of time. However, in recent times, the possibility of a highly negative event is as high as it has ever been. The GDP unexpectedly contracted for two consecutive quarters, raising the odds of the economy entering a recession.
