CD Laddering

At the most basic level, by “laddering” your CDs, you avoid investing all of your money at a low rate of return. You increase liquidity because you are never more than one year from a portion of your money at any time.

Here’s how it works. You take an amount of money to the bank—for math’s sake we are going to say $5000. You invest $1000 of that money into a 1 year CD, $1000 in a 2 year CD, $1000 in a 3 year CD, etc. Each CD represents a rung of the ladder.

At the end of the first year, when the first CD matures, you take that money and re-invest it in a 5 year CD. Now you again have 5 CDs with the next one maturing in one year. At the end of each year, you invest the full amount of the matured CD into a new 5 year CD.

By investing in multiple smaller CDs, the investor has less risk of interest rate swings because there is less money invested in each CD. The rewards are higher in the end as well, and the flow of income is steadier because 1/5 of the investor’s assets are liquid at the end of each year.

Your Deposits Are Safe and Secure

ECU, your savings are federally insured by the U.S. Government through the National Credit Union Administration (NCUA). NCUA insures your individual savings accounts up to a maximum of $250,000, regardless of the number of individual accounts you may have.

Effective April 1, 2006, NCUA has announced that they will now insure IRA deposits up to an additional $250,000 instead of $100,000. Joint, individual, retirement, and other account relationships are insured separately. To view NCUA Deposit Booklet click here.

In addition to NCUA, Excess Share Insurance (ESI) provides an additional $250,000 of savings coverage to qualifying accounts. ESI is a licensed property and casualty insurance company. Members exceeding the maximum level of coverage provided by the NCUA are also insured up to an additional $250,000 by ESI. For example, if a member has a savings account, checking account and certificate of deposit at ECU that when added together totals $300,000. The first $250,000 is insured by NCUA with the remaining insured by ESI

IRAs

INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): Education Credit Union is your financial partner for life, so there's no better place to start planning for your retirement years. Choose a Traditional IRA or a Roth IRA. Each earns competitive interest rates, requires no additional set-up fee or a maintenance fee and provides all the tax advantages you need. Deposits may be tax deductible, and your investment grows with tax deferred interest. You can open an IRA with us for as little a $50. 

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C.S. Wilson & Associates

Cathy Wilson
Phone: 806-352-9251
E-mail: cathy.wilson@multifin.com

Jason Dettman
Phone: 806-322-1250
E-mail:jason.dettman@multifin.com

Sally Miller
Phone: 806-352-9251
E-mail:sally.miller@multifin.com

A Word From C.S. Wilson & Associates - WEEKLY ECONOMIC UPDATE

CONSUMER SENTIMENT HITS A 4-YEAR PEAK
May’s initial Thomson Reuters/University of Michigan consumer sentiment survey came in with an index reading of 77.8, the highest mark since January 2008. The current economic conditions sub-index rose to 87.3 from last month’s final 82.9 reading. Descending oil and gas prices may have been factors promoting some optimism.1

BIGGEST DROP IN PPI IN 6 MONTHS
Falling energy prices influenced this development as well. Producer prices retreated 0.2% in April according to the Labor Department. Economists surveyed by Reuters had forecast no change. The bulk of the retreat was attributed to the 1.4% April drop in energy costs. The PPI has only risen 1.9% in the last 12 months, the smallest annualized wholesale price inflation recorded since October 2009.

NEW DOUBTS IN THE EU AFFECT STOCKS
Eurozone elections brought new worries about whether Greece would abide by austerity cuts and stick with the euro. Efforts to form a coalition government in Greece stalled last week, and French president Nicolas Sarkozy was defeated in his reelection bid by socialist candidate Francois Hollande. Factor in the usual spring thoughts about whether stocks are ready to pull back, and the weekly losses were as follows: S&P 500, -1.15% to 1,353.39; DJIA, -1.67% to 12,820.60; NASDAQ, -0.76% to 2,933.82.

THIS WEEK: Facebook’s IPO is scheduled for Friday, and there are plenty of other news items on tap. On Monday, Groupon comes out with Q1 results. Tuesday, the April CPI appears plus data on April retail sales and earnings from JCPenney, TJX, Dick’s Sporting Goods, Saks and Home Depot. Wednesday brings data on April housing starts and industrial output, the April 25 FOMC minutes, and Q1 results from Deere, Abercrombie & Fitch, Target, Staples and Limited Brands. The Conference Board’s April consumer confidence index and new initial claims figures are out Thursday, joined by Q1 earnings from Wal-Mart, Dollar Tree, Ross Stores, Gap, Aeropostale and Sears. As Facebook starts trading on Friday, a G8 summit also starts at Camp David; Q1 results also arrive from Ann, Inc. (formerly Ann Taylor).

Call C.S. Wilson & Associates to see how your money should be managed. We are located inside the Hillside Branch.

Please Click Here for more information about C.S. Wilson & Associates.

Investors should consider the investment objectives, risks, charges and expenses of the funds (or variable annuities) carefully before investing.  The prospectus contains this and other information about the funds (or variable annuities).  Please contact our office or the mutual fund (or variable annuity) company to obtain a prospectus, which should be read carefully before investing or sending money.