Black swan events land crisis situations such as the COVID-19 pandemic can lead to market crashes, investor panics, and bear markets. However, markets have always historically recovered—and these drops may offer long-term opportunities for shrewd investors and companies able to capitalize on consumer behavioral changes such as the shift to using video conferencing for more efficient communication and distance learning, or programmatic advertising automation enabling advertisers to reach audiences more efficiently and effectively.

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the widespread insistence they were obvious in hindsight. – Investopedia

COVID-19: How Long Will it Last?

It’s difficult to predict how long COVID-19 will impact markets, as its societal and financial disruption is unprecedented. In fact, the S&P 500 reached a bear market in just 16 days, the fastest time period on record.

Black Swans: Short-term Crisis, Long-term Opportunity

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. In today’s Markets in a Minute chart from New York Life Investments, we explore the sell-off size and recovery length for some of these events. READ MORE on Visual Capitalist