Buying Fannie Mae Stock First

Fannie Mae stock has been a hot topic lately, and with so many watching this stock, I felt it was about time to get involved myself. Earlier in the week, I had purchased $1,000 in Fannie Mae, for a total of 575 shares. The start of the month does look good for Fannie Mae as the Mortgage Bankers Association called for Congress to make a big change for the major mortgage lenders Freddie Mac and Fannie Mae, requesting that the government controlled mortgage lenders be divided into several smaller privately-held companies.

This news sent shocks through a lot of the day trader communities, and many quickly began dumping their shares… I was not one of them. I am not trying to work as a day trader, but I am looking for safe places to put money while the economy recovers. To me, it seemed like the largest mortgage lender in the nation might be one of those places.

The purpose of my investing is not to find a place to have slow gains and stability, my goal is to find volatile companies that are likely to increase  and increase greatly. With this style of investing comes a much greater risk, and thats more or less what we got to see this week.

The news from congress, coupled with the irrationality of the day traders, drove FNM all the way down to $1.40 and reduced my holdings to $787.75 from$1000, not a great start to the journal… but thats how it is sometimes. The goal is to hold at this point, and see where the market is headed. With the recent gains and huge volume that has gone into Fannie Mae, the volatility has increased.

Total Invested  – $1000.00

Ending Total Portfolio Value – $787.75

9/2/2009