Gifts Around the Tree

Why do we give gifts?

Photo: Kevin Kay. Source: Wikipedia

The Native Americans had “potlatch.” Pacific Islanders had “Aropa.” Techies today have open-source software. And most people exchange gifts around the holidays. But is gift-giving rational?

A lot of economists say no. They look at the all the fruit cakes sent-but-never-eaten or the ugly ties or sweaters politely acknowledged and then discarded. Theses economists see nothing but a waste of money. One study estimates that as much as a third of the money spent on Christmas presents is useless. They recommend that people give money for Christmas, or give nothing.

But these Scrooges miss how important gift-giving is to our social fabric. Your kids may groan when they open the sweater from Aunt Polly, but you understand the time, energy, and love she put in to knitting it. That kind of present is a gift to the whole family. It strengthens your relationship. And the best gifts satisfy a need before the recipient even realizes that they had it.

Such presents require a significant investment of time and energy – thinking like the intended recipient, getting into their head, then acting on any insight you have. Some folks are gifted gift-givers, their presents always seem to be spot-on. We’re all prisoners of our own perspectives; we have a hard time seeing the world like someone else. But when we make the effort, we strengthen our friendships and social bonds. And the more we bond with others, the better off we all are. Strong and resilient social connections help everyone – physically, emotionally, and spiritually. It may not be rational, but it’s real.

And as Linus told Charlie Brown at their pageant, isn’t that the real meaning of Christmas?

Douglas R. Tengdin, CFA

By | 2017-12-01T05:40:47+00:00 December 1st, 2017|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. –
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