Annaly Capital Management, Inc. (NYSE: NLY) is benefiting from an improvement in the average yield on interest-earning assets. The company's prudent asset selection will drive its performance. However, the current market volatility and interest rate fluctuations are near-term worries. Additionally, the company's dividend reduction and an unutilized share repurchase program highlight concerns regarding capital distribution. NLY's investment strategy is driven by the prudent selection of assets and effective allocation of capital to achieve stable returns. The company's investment strategy involves traditional Agency mortgage-backed securities (MBS), which provide downside protection, as well as investments in more non-agency and credit-focused asset classes that aid in enhancing returns. Also, a scaled MSR platform will continue to benefit from a low prepayment environment. As of Mar 31, 2024, its investment portfolio aggregated $87.5 billion. Further, the company is focused on diversifying its investment portfolio. The company seeks to stabilize and diversify its investment portfolio through investing in Agency MBS and residential credit. NLY's strong liquidity position enables it to reinvest in the franchise. In 2022, it sold its Middle Market Lending portfolio and exited its commercial real estate business. Through these exits, Annaly was able to enhance capabilities across its core ...