When the term "black swan" is used in investment circles, it denotes the occurrence of a powerfully negative and unpredictable event with acute and often long-term adverse effects. Some of these events have a natural origin: earthquake, tsunami, hurricane. Some are caused by men: war, irrational exuberance and various financial bubbles.
There are even premeditated investment catastrophes. When prices rise too high, intelligent and influential players precipitate a crash or decline, allowing them to buy back quality securities at discount prices.
Most of these events are unpredictable as to time and place, but everyone knows that nature has her rages and releases, that men do start wars and that nuclear accidents and acts of terror do occur. Black swans may surprise but they do not violate the laws of nature or of man's nature. They will occur.
We have had five years of orderly recovery in the stock market. We have more than doubled off of the low. There have been only minor man-made events and a few isolated natural events, which did not substantially affect the market's five-year trend.
Wise and experienced investors know that this is the time to insulate oneself from the next black swan. It is no longer prudent to extend risk. By spring, one should be risking only that amount which might be completely lost without causing trauma. It is always delicious to buy after a bubble bursts.