Black Swan

A black swan is an unthinkable event that has a major effect in one’s life. It was coined by Nassim Nicholas Taleb. Examples of black swan events would be the Sept 2011 terrorist attack and the market crashes that has happened in the past or will happen in the future.

A market crisis happens on the average of once around every five years. The last market crash that happened was during the Great Financial Crisis of 2007-2009. With such crises happening at random and being hard to predict, how are we going to position ourselves to take advantage of such black swan events?

Firstly, we must not borrow to invest. If we were to do so, our emotions will affect us when a crisis happens and we will not be able to act decisively. During the time when we should be buying more, we will end up losing money by cutting losses due …