Your money questions answered

Question: I'm thinking about putting most of my cash in Fannie Mae or Freddie Mac stock, since the price of the shares is so low. Shouldn't the bailout help those stocks rise? --Jelani Jenkins, location withheld

Answer: Putting all your money into one or two stocks is an invitation to disaster -- and that's true even if the company isn't, like these, losing billions of dollars in an imploding market (though you earn points for optimism in grim times). Moreover, it's not even clear that Fannie and Freddie are a deal at today's prices. Such bargain-basement temptations are usually cheap for a reason, says Erick Ormsby of Alcosta Capital Management. "These companies have a whole host of problems that will take a long time to work out," says Ormsby, "even if the government doesn't let them fail."

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