Love Is In the Air

Sent: Monday, February 13, 2012 11:48 PM
Subject: Global Market Update

What can we learn from Valentine’s Day?

I’m probably going to get in trouble for this, but Valentine’s is an elective holiday. Spouses and sweethearts understand that if you don’t have a job, it’s hard to spend cash on flowers and chocolate. That’s one reason why gift spending fell off a cliff in 2009 during the recession, and in 2010 just as the recovery was getting going. But 2012 looks to be a record year. And big-ticket items, like jewelry and eating out, are up even more.

So it’s significant that this year’s holiday spending is expected to be $17.6 billion, or $126 per person. That’s an 8 1/2 % increase from 2011. For many florists, it’s the busiest holiday of the year. Clearly, we’re better off than we were a year ago.

This is good news for the economy. If more people are making discretionary, elective purchases that indicates that jobs are more plentiful, raises and bonuses are more generous, and overtime is more likely. Of course all this spending doesn’t push the economy higher; the money spent on flowers would probably have been spent in other ways. But since discretionary holiday spending comes at a fixed point in time, it provides a convenient reference point for comparing one year to the next.

Not all the lessons from Valentine’s Day are economic, though. Receiving an especially thoughtful gift can reveal that your significant other has paid close attention to what matters most to you. Dark chocolate, roses, and red wine may be common, but sometimes the most traditional messages can also be the most profound.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By |2017-07-17T12:34:58+00:00February 13th, 2012|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. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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