New Tools for Investing in a Black Swan World

by Ellie Winninghoff, Financial Advisor Green, May 4, 2011

Hurricane Katrina, the mortgage meltdown, the BP Deepwater Horizon tragedy, uprisings in the Middle East, Fukushima–it’s hard not to notice a pattern of escalating risk. One not accounted for by the mere volatility in stock or bond prices that has come to represent the underpinnings of how investors assess risk. How do you quantify these? And are they really Black Swans? After all, most of these crises were predictable—if investors had bothered to gather the right data and incorporate it into their analyses.

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