COVID-19 Black Swan

Caught Off-Guard by COVID-19? Prepare Yourself for the Next Black Swan—Here’s How

A black swan is an event that is so far outside of the norm that it cannot be reasonably anticipated by markets and investors. I think it’s fair to characterize the COVID-19 pandemic as such an event.

I have my thoughts on what the outcomes may be, but I need more data on the ground before I consider approaching any prognosticating. For now, let’s say that while the type and timing of a black swan event cannot be anticipated, the notion of such an event occurring at some point in the future can certainly be rationalized and should be prepared for.

In other words, while we do not know what black swan will emerge, where, or when, we can assume that it will happen, and we should make an effort to be prepared.

In today’s article, I’d like to address what it means to be prepared for a black swan event.

How to Prepare for Unforeseen Events as a Real Estate Investor

Realistically, there are many moving parts to this, but at the bottom of this pile is a cold, hard reality that everything comes down to a super simple acronym—LLBP.

Preparedness for a black swan event includes three hurdles:

  • L (Liquidity): This helps you survive the black swan.
  • L (Location): This helps you recover from the black swan.
  • BP (Business Plan): This helps you protect from the downside and achieve long-term prosperity.

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