yields is around 4.5 percent. How can they do this while Fannie Mae and Freddie Mac have crashed?

— R.B., Oakland

A: Ginnie Mae is the "good sister" because it guarantees payment of principal and interest on loans issued by the Federal Housing Administration and the Department of Veteran Affairs, which are backed by the full faith and credit of the U.S. government.

But a Ginnie Mae is a bond and Ginnie Mae funds are bond funds, and I don't like either because of their sensitivity to interest rates. But I have to admit that the most popular Ginnie Mae fund, Vanguard GNMA Fund, with $13.5 billion in assets, has seen its net asset value fluctuate very little over the past several months, but its year-to-date return is only 1.5 percent. When interest rates rise the net asset value will decline.

Its yield at this writing is an attractive 5.16 percent. Check this out by entering VFIIX on finance.yahoo.com.

Q: I have an IRA with TIAA-CREF, rolled over from an employee plan into a guaranteed annuity. You recently mentioned that a rollover should be into a self-directed IRA. Where should I go and what should I invest in?

— J.C., Oakland


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A: My recommendation is something you may not like because I am sending you on a new course. You should roll again into a self-directed account at a discount brokerage like Scottrade (Oakland office, 836-7506) and then create a portfolio of stocks and stock funds. This a good time to buy stocks. The people at Scottrade will not tell you what to buy but will provide you with some research material. Or you might check out reports on various blue chip companies like General Electric, Procter & Gamble and Johnson & Johnson in Value Line Investment Survey, available at most libraries. Also, my newsletter (see the bottom of the column) will provide you with some ideas.

Q: I have been a faithful reader of your column for many years. With the education I got from you, I plunged into the stock market in 1983 with $11,000 from stock that I sold after leaving my employer of 15 years. I have had a few serious misfires along the way. But, basically, I have gained more than I lost. I currently own 18 stocks with a total of 3,734 shares (the odd numbers are not my doing) in my portfolio with Charles Schwab.

The stocks are mostly income types, some of which have grown more than 200 percent.

Even with the current crisis my portfolio value declined only 9.76 percent year-to-date through Sept. 30. October was a little worse, but I'm not given to panic. Since my primary focus is on steady income, along with the need for readily available cash, I don't necessarily agree with your asset allocation.

But I have found your basic principles to be sound. So I just wanted to take this opportunity to thank you.

— J.Z., by e-mail

A: Thank you. Let me call you Jane (that's not her real first name) so that I can brand you as "Jane the Investor," a comparison to the fame gained by the articulate and intelligent "Joe the Plumber" and "Tito the Builder" in this year's presidential campaign.

Cliff Pletschet's Personal Finance column appears Sunday and Monday. Send general-interest questions to him at P.O. Box 28147, Oakland, CA 94604 or e-mail him at cliffpletschet@sbcglobal.net. Give your name, city and the question in brief form. To subscribe to his quarterly newsletter, Investment Educator, send $20, made out to Personal Investment Education, to the above address. Also, visit our Web site, www.investment-educator.com.