It’s nearly a cliche at this point to say that the coronavirus has changed the world. More specifically, it has made us all much more aware of risk and uncertainty. The entire world just discovered that what happens in a wet market halfway around the world can threaten the lives of our loved ones, take away our jobs, destroy our retirement portfolios, and curtail our personal freedoms. In finance, this is known as a tail risk: a catastrophic event we assumed had a low probability of happening or never could have imagined. Once a tail risk occurs, it will never feel improbable again; we become more aware of risk for the rest of our lives.

It is still too soon to tell how the COVID-19 crisis will change our behavior. Will we never look at a crowded room the same way again? Cruises used to be seen as low-risk vacations, predictable and well-planned, but now, their tail risk — being trapped on a boat while exposed to a grave health risk and unmoored for days — feels much more real and may weigh on our minds forever.