With door-to-door Christmas caroling having gone the way of the horse and buggy, Halloween is our last national holiday where we get to meet a lot of our neighbors. Of course, the next day you might not recognize the children when they’re not dressed like little princesses, monsters, or superheroes. But their parents should look familiar.
However, Halloween has another big benefit. And that’s its impact on the economy.
According to the Foundation for Economic Education, major spending on a holiday can have significant positive short-term benefits for the economy, by encouraging extra purchases that might not otherwise occur.1
They write, “Many economists believe the increase in spending around Halloween has a positive effect on the economy. Increased spending generally leads to higher gross domestic product (GDP), helping to jump-start economic activity and lead to potential job growth.”
As you might expect, there are other economists who hold a contrarian view. They say that spending on seasonal consumer goods—especially one-use items like costumes and decorations—divert resources from more productive activities. They also point out that buying a costume for the purpose of collecting candy that you may not like is less efficient than using the money you would have spent on the costume to buy only the candy you do like.
This is an example of how the mathematics of pure economics can be divorced from human behavior. Yes, on paper the method mentioned above is a better way to get candy. But would anybody actually think this way. The entire holiday is a little silly and yet it’s this sense of fun that is the catalyst for significant economic activity.
According to the National Retail Federation (NRF), 69% of consumers are planning to celebrate the holiday this year. This is a higher participation rate than before the pandemic. As a result, they estimate that total spending will eclipse last year’s record of $10.1 billion for a total of $10.6 billion.2
But the benefits don’t stop there. According to economist Jeffrey A. Tucker, Halloween teaches children valuable lessons about how the economy works. In a paper for the Ludwig von Mises Institute, he argues that the holiday demonstrates to young people that they should work for their rewards, that bartering is an option, and that their appearance matters.
We wish you a happy Halloween and playfully suggest that everyone’s financial plan should consider a small budget for a good variety of candy around this time of year.
If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.
Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc., A Financial Advisor in Utah
11576 S State Street, Bldg. 1002
Draper, UT 84020
Sources:
1. http://go.pardot.com/e/91522/s-halloween-affect-economy-asp/8cmck9/1706404124?h=VVhhuOA7noqMeIh04Ti5sHx6co5-Nwy18pzJxFMYJCo
2. http://go.pardot.com/e/91522/andemic-levels-record-spending/8cmckd/1706404124?h=VVhhuOA7noqMeIh04Ti5sHx6co5-Nwy18pzJxFMYJCo
Disclosure:
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by Efficient Advisors, LLC (“EA’) for Mark Lund, Mark is a Financial Advisor in Utah. He is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment management and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Effective Investor Newsletter. Cities served in Utah are: Salt Lake City, Salt Lake County, Utah County, Park City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, American Fork City. The views expressed herein are exclusively those of Efficient Advisors, LLC (‘EA’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EA makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.
