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From: usenet@ucbvax.ARPA (USENET News Administration)
Newsgroups: net.invest
Subject: Re: Info on \"Ginny Maes\"
Message-ID: <10667@ucbvax.ARPA>
Date: Tue, 15-Oct-85 16:01:12 EDT
Article-I.D.: ucbvax.10667
Posted: Tue Oct 15 16:01:12 1985
Date-Received: Thu, 17-Oct-85 00:49:44 EDT
References: <844@decwrl.UUCP>
Reply-To: mazlack@ucbernie.UUCP (Lawrence J. Mazlack)
Organization: University of California, Berkeley
Lines: 27

>I would appreciate it if any of you investment geniuses out there would
>comment on the advisability of investing in Ginny Maes.  I have a relative
>who has about $50,000 to invest.  This money is now in regular savings
>accounts.  The relative is elderly, and this is her only liquid assets,
>aside from her pension and Social Security.
>
>Specifically, what are the pros and cons?  How long is the money tied up?
>What is the minimum you have to invest?  Are there better solutions for
>a person in her position (widowed and retired)?
>
The advantages are: secure principal and higher than T-bill interest return
The disadvantages are: (1) you don't know how long it will be good for as
                           these are loans that can be paid back at any time
                       (2) Until maturity, they trade as if bonds; i.e., their
                           value can be less than (or greater than) what
                           you originally paid for them
                       (3) There is some book keeping involved
                       (4) The normal trading amount is $100,000.  However,
                           you can buy smaller hunks (at a premium)
From: mazlack@ucbernie.BERKELEY.EDU (Lawrence J. &)
Path: ucbernie!mazlack

If you do go with them, I would recomment Vanguard's no-load GNMA fund.  (I
personally use it for my IRA)

However, for a widow, I think that she would be better off with a collection of
T-bonds with different maturities. T-bonds come in $10,000 hunks.