- The Profit Zone
- Posts
- Black Swan Events: Building a Portfolio That Can Survive the Unexpected
Black Swan Events: Building a Portfolio That Can Survive the Unexpected
Unpredictable Markets Require Unbreakable Portfolios—Here’s How to Build One
Dividend Dominator
March 17, 2025
In partnership with
Tackle Your Credit Card Debt With 0% Interest Until Nearly 2027 AND Earn 5% Cash Back
Some credit cards can help you get out of debt faster with a 0% intro APR on balance transfers. Transfer your balance, pay it down interest-free, and save money. FinanceBuzz reviewed top cards and found the best options—one even offers 0% APR into 2027 + 5% cash back!
Welcome to The Profit Zone 👋
Where thousands of millionaires, CEO’s and high-performing entrepreneurs read the #1 financial newsletter on the web.
👉️ This Past Friday: The Best Day For Stocks in 2025 💰️
👉️ Black Swan Events: Building a Portfolio That Can Survive the Unexpected 🫢
👉️ The Profit Zone Premium: Your Ticket To Beating The Market in 2025 📈
"Beware the investment activity that produces applause; the great moves are usually greeted by yawns."
This Past Friday - The Best Day For Stocks In 2025
Stocks rebounded sharply on Friday after the S&P 500 fell into correction territory, with the S&P 500 rising 2.1%, the Nasdaq gaining 2.6%, and the Dow increasing 1.7%, marking their best single-day performance since November 2024.
Despite the rally, all three major indexes posted weekly losses due to growing concerns over Trump’s tariff policies, which may accelerate inflation and slow economic growth.
Tech stocks led the rebound, with Nvidia up 5%, Tesla rising nearly 4%, and other major tech firms like Apple, Microsoft, and Amazon posting solid gains.
AI-related companies like Palantir and AppLovin jumped about 8%, while MicroStrategy surged 13% as Bitcoin recovered to $84,200.
In other news, gold held steady at $2,990/oz after briefly surpassing $3,000, while crude oil rose to $67.15/barrel.
The 10-year Treasury yield ticked up to 4.32%, reflecting ongoing economic uncertainty.
Market watchers remain focused on Congress and their next moves.
It seems like anytime President Trump mentions the magic “T” word everything starts tanking.
Unpredictable Markets Require Unbreakable Portfolios: Here’s How to Build One
In 2008, Alex thought he was set for life.
He had a solid portfolio, at least, that’s what his financial advisor said.
A little tech, a little real estate, and a healthy helping of blue-chip stocks.
Nothing too fancy. Nothing too risky. Then the world fell apart.
When Lehman Brothers collapsed, the dominoes started falling.
Alex watched his carefully curated portfolio shrink by 40% in just a few months.
Retirement? Delayed.
That vacation home? Gone.
Even worse, his confidence was shattered.
How did this happen? More importantly, how could he protect himself from it happening again?
The truth is, most investors build their portfolios for the expected: steady growth, predictable returns.
But Black Swan events are, by definition, the opposite.
Unpredictable and catastrophic.
And yet, they happen more often than we like to admit: the 2008 financial crisis, the dot-com bubble, the COVID-19 pandemic.
Each time, investors like Alex learn the hard way that traditional diversification isn't always enough.
So, how do you build a portfolio that can survive the unexpected?
1. Expect the Unexpected
First, accept the reality: Black Swan events will happen.
If you think another crisis is decades away, think again.
History suggests these events are not once-in-a-lifetime anomalies but regular disruptions.
Preparing for them is not about predicting the future, it’s about resilience.
2. Diversify, But Diversify Smarter
Alex thought he was diversified, but his assets all moved together when the market tanked.
Real diversification means owning assets that react differently to economic shocks. In other words, uncorrelated assets.
Equities: Yes, but across industries and regions.
Bonds: Consider government bonds for safety, but also explore inflation-protected securities.
Commodities: Gold and other precious metals often rise when everything else falls.
Alternative Investments: Real estate, private equity, and yes, even a little cryptocurrency can provide non-correlated returns.
3. Embrace the Barbell Strategy
Nassim Taleb, the very man who coined the term "Black Swan," advocates for a "barbell" strategy. I implement a modified barbell strategy myself.
It works like this:
80-90% in safe, conservative assets (like cash, Treasury bonds, or dividend-paying blue-chip stocks).
10-20% in high-risk, high-reward investments (like emerging tech, venture capital, or speculative plays).
This approach strikes a balance between low risk and high risk assets, and doesn’t touch anything in the middle.
Should the market dip, you’re only exposed to up to 20% of your portfolio. The other 80% shouldn’t move up or down very much and act as a solid foundation.
4. Hold Cash (Yes, Really)
Cash is not exciting and it won’t double overnight.
But when the market craters, cash is king.
It gives you optionality: the ability to buy distressed assets when everyone else is panicking.
Think of it as your dry powder.
Powder that will make you very rich someday.
5. Stress-Test Your Portfolio
Would your portfolio survive another 2008?
What about a prolonged recession or a geopolitical shock?
Regularly model worst-case scenarios.
There are tools online that can simulate how your assets would perform under extreme conditions.
Use them.
Alex's Second Chance
After 2008, Alex rebuilt his portfolio with these lessons in mind.
He didn’t chase the latest tech fads or try to predict the next boom.
Instead, he balanced safety with smart risks.
When COVID-19 hit, his friends panicked as markets tanked.
Alex? He had cash on hand and bought quality stocks at a discount.
By 2021, his portfolio had not only recovered but grown beyond his pre-2008 dreams.
The next Black Swan event is coming, you just don’t know when.
But if you prepare today, you won’t be a victim of the unexpected.
You might just find yourself thriving in the chaos.
See you in the next one!
Compounding is the closest thing to magic in finance.
$100 invested at 10% per year becomes $673 in 20 years.
Now imagine what happens with $10,000 or $100,000.
Get invested.
— THE DIVIDEND DOMINATOR (@TheAlphaThought)
6:55 PM • Mar 13, 2025
Did you enjoy this newsletter? |
The Profit Zone Premium
If you're serious about protecting and growing your wealth, The Profit Zone Premium gives you the edge you need.
When you join, you get immediate access to:
2025 Stock Picks That Are Beating the Market: Our hand-selected investments are already delivering positive returns while others are struggling.
The Profit Academy Community: See every buy and sell I make in real time. No guesswork, just actionable insights.
One-Page Deep Dives & Earnings Summaries: Quickly understand high-quality stocks with concise, research-backed reports.
Direct Access to Me: Got a question? Ask me anytime and get straight answers.
Act Fast: The price just doubled to $20/month last week and will increase with every 50 members who join. Lock in your rate now before the next price hike.
Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.
Dividend Domination Inc. is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.
THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.
Any projections, market outlooks or estimates herein are forward-looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.
The publisher, its affiliates, and clients of the publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Neither the publisher nor any of its affiliates accept any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.
By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.
Reply