Against a backdrop of economic uncertainty made worse by the second catastrophic hurricane to rip through the Gulf of Mexico and hit the oil and gas industry in Texas and Louisiana in a month; imminent change in leadership at the Fed; rising oil and gas prices and interest rates; and other potential worries for investors and advisors, we had the good fortune to talk with Quincy Krosby. Dr. Krosby’s perspective on economic and geopolitical events is unique, because, among other things, she brings her experience as a U. S. diplomat and her London School of Economics Ph.D. to her role as chief investment strategist at The Hartford. Kate McBride sat down with her in early October.
What is the No. 1 client issue that advisors are facing today? Nervousness among investors–about the state of the world, the state of the economy, leadership. All of these negatives conspire to keep an investor out of the market; they find one reason after another why this is not a good time to invest.
Is there an economic issue that stands out? Certainly energy costs are the most visible–they see it every day–they go to the filling station, so they know that prices are going up. Pretty soon we’ll be heating our houses and they’re going to see the effect of that, and at the same time you also have higher interest rates, which already have shown up on credit card debt, so more and more they’ll be seeing a bit of erosion of their personal disposable income.