A few weeks into the New Year, investors seem to be in a carefree mood. The traditional measures of volatility remain at extremely low levels. After all, the European economic crisis has calmed, budget negotiations in Washington aren't front page news at the moment, and earnings season is unfurling without much drama (except for Apple's (Nasdaq: AAPL) sobering near-term outlook).
How little volatility is there in the market? The Volatility Index (VIX), which uses options trading activity as a gauge of investor fear, is at its lowest level in two years.
Though investors were a bit spooked in late December in the face of the budget crisis (which temporarily spiked the VIX), the long-term volatility trend has been gliding lower. Simply put, investors know the typical risks that can derail the market, and they are expecting little drama in coming months.
But what about the types of issues that investors can't see coming? Nassim Taleb, an author focused on randomness, probability and uncertainty, calls these unforeseen events "Black Swans." When one of these occurs, the market can take a fairly significant hit.
Here are four possible Black Swans that may roil the market in 2013.
| 1. Iran deepens its nuclear enrichment program and the U.S. responds |
 The issue of Iran's nuclear ambitions has been in the news for so long, that investors seem to have forgotten about it. Although the U.S.-led sanctions are having a major effect on the Iranian economy, there has been little movement by the Iranian government to seek a face-saving compromise.
David Sterman
David Sterman has worked as an investment analyst for nearly two decades. He is currently an analyst for StreetAuthority.com
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