Why we invest in secured CDs/Savings
Stocks with a nice juicy yield are certainly an attractive investment - until you lose all of your hard earned money. Fannie Mae (FNM) and Freddie Mac (FRE) were paying nice dividends and good yields for years. Now the American flagship stocks are virtually worthless. On Monday, 09/08/08, both stocks lost 80+ percent of their value in 1 day!! Apparently, the government bailout didn't apply to common stock holders, last year the stock was worth $60 per share but today is worth only one greenback ($1). Is now the time to buy? Most analysts do not believe so. The U.S. goverment has taken control of Fannie and Freddie and no one knows for certain what the future holds for the common stock holders - however, given the current stock price, I think the writing is on the wall. RIP.
Thanks to the reader who provided this article.