On March 18, 1944, twenty-six people die, and thousands are evacuated from their homes during an eruption of Mount Vesuvius on the Gulf of Naples.
It was the least of Italy’s worries in those fateful years, and the eruption pales in comparison to the destruction of the one in 79AD, where Herculaneum and Pompeii were wiped out by volcanic ash and gas. Yet, volcanic activity demonstrates that significant risk is still present. Vesuvius has erupted numerous times, with significant eruptions recorded in 1631, 1794, and 1944. These eruptions varied in intensity, causing damage to surrounding settlements and prompting evacuations of nearby populations. Today, over 700,000 people now live in the “death zone” around Mt. Vesuvius. Clearly, the painful lessons of history are no match for the allure of wine, olives, and ocean-front property. Despite its frequent activity, Vesuvius remains closely monitored, with scientists and authorities implementing measures to mitigate the potential impact of future eruptions on the densely populated region surrounding the volcano. The risk is known, and despite the volcano’s current quiet period, scientists are attempting to measure and mitigate it. Now that is risk management. Regularly assessing and evaluating risks within a portfolio is akin to navigating a ship through turbulent waters. Then again, that might not be the best metaphor given that the Admiral of the Roman Fleet, Pliny the Elder, died sailing to offer assistance to Vesuvius’s victims in 79AD. Nevertheless, portfolio risk management requires vigilance and adaptability. Investors must continually scan the horizon for potential threats that could disrupt the smooth sailing of their investments. Conducting thorough risk assessments involves identifying and analyzing potential threats to the portfolio, including market volatility, interest rate changes, and geopolitical events. Risk management also means staying vigilant and adaptive during the calm periods where nothing is on fire. Now, when nothing is happening, is the best time to make sure you will be prepared when market volatility erupts.
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Patrick HueyPatrick Huey is a small business owner and the author of two books on history and finance as well as the highly-rated recently-released fictional work Hell: A Novel. As owner of Victory Independent Planning, LLC, Patrick works with families and non-profit organizations. He is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Advisor in Philanthropy® and an Accredited Tax Preparer. He earned a Bachelor’s degree in History from the University of Pittsburgh, and a Master of Business Administration from Arizona State University. Archives
September 2024
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Patrick Huey is an investment advisor representative of Dynamic Wealth Advisors dba Victory Independent Planning, LLC. All investment advisory services are offered through Dynamic Wealth Advisors. You can learn more about us by reading our ADV. You can get your copy on the Securities and Exchange Commission website. See https:/ / adviserinfo.sec.gov/IAPD by searching under crd #151367. You can contact us if you would like to receive a copy. The tax services and preparation conducted by Patrick Huey and Victory Independence Planning are considered outside business activities from Dynamic Wealth Advisors. They are separate and apart from Mr. Huey's activities as an investment advisor representative of Dynamic Wealth Advisors.
Patrick Huey is the author of three books: "History Lessons for the Modern Investor", "The Seven Pillars of (Financial) Wisdom" and "The Gifts hat Keep on Giving: High Performance Philanthropy For Real People"; this is considered an outside business activity for Patrick Huey and is separate and apart from his activities as an investment advisor representative with Dynamic Wealth Advisors. The material contained in these books are the current opinions of the author, Patrick Huey but not necessarily those of Dynamic Wealth Advisors. The opinions expressed in these books are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. They are intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed in these books is no guarantee of future results. As always please remember investing involves risk and possible loss of principal capital.
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