SAN BERNARDINO, Calif.-One leader of a small CU has found a change in investment philosophy is paying off.
Gregg Stockdale, CEO of $35.8-million 1st Valley CU, believes too many credit unions are overly conservative in their investment approach. He believes CUs are "obligated" to get the best yields for their members.
"Credit unions buy and sell money, and many are having to put more into investments because they cannot make loans," he said. "Laddering investments is the key."
Over the last 15 years, a five-year ladder has three times the average return of a one-year ladder, Stockdale said. But when investments go longer, he cautioned, they must be risk weighted at maturity. "Credit unions should think longer because it brings better yields," he said. "Conservative investments are not earning the income they could."
