Black Swans Give No Warning

October 8, 2014

by Michelle Perry Higgins

Start Shopping for Long-Term-Care Insurance at 45I don’t mean to be flippant, but surprises can’t be predicted in advance. True Black Swans give no warning. That being said, there are plenty of scary situations in the current economic and political environments; the impending completion of tapering by the Federal Reserve, the stalling economic growth in Europe, the conflict in the Middle East, Russian interference in Ukraine and the Ebola epidemic in West Africa.

In any event, the way to deal with surprises or scary situations is basically the same; prepare in advance by designing a well-diversified investment portfolio based on time horizon and risk tolerance and then rebalance when appropriate.