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Lufthansa Employee Federal Credit Union

LHCU News - Interoffice Circulation and Bulletin Boards

January, 2019

Dear Friends:

In 2018 the financial markets were very volatile. The daily gyrations of the indexes are a worrisome situation. On the positive side, corporate earnings will continue to bubble for some time, reflecting the 2018 cut in corporate taxes. Companies which undertook stock buybacks in early 2018 are now facing large paper losses in a declining market.

Private investors should be extremely careful and should forego questionable opportunities. The strife for success could be ones worst enemy!

For the past two years, the credit union left higher yielding long term investments on the table to avoid being caught in a devastating interest squeeze. I personally do not forget the 1980s when Chemical Bank now JPMorgan Chase in East Meadow, paid to the credit union 18% interest on a 1 million dollar six month CD and mortgage rates were hovering around 12%.

Granted, authorities have over the years implemented market curbs and other circuit breakers to avoid these irregular market conditions, yet the inflationary cycle started and will not reverse its course soon.

As a precaution, we have set aside a moderate reserve for investment losses to cover future interest risks, although 75% of our investments have a maturity of 3 years or less.

The credit union will make the following extra dividends:

IRA (Dec) || 2.20% ||+ 0.15% || 2.35%
POA - Money Market (Dec) || 2.00% || + 0.25% || 2.25%
Regular Shares (4th Q) || 1.25% || + 0.25% || 1.50%
1st Mortgage || REFUND || $150.00
2nd Mortgage || REFUND || $ 50.00

On behalf of our Board of Directors, we enclose our financials and thank you for your loyalty and trust.


Franz Herzig

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