Think of a person you would trust to hold $10,000 of your money.

Got someone? If you do, it’s probably because you know that when they say they will take care of your money, they will. You know that because they have proved, time and time again, that they stick to their word.

It's the same with investing, that is why with Annaly Capital Management (NLY -0.70%) reporting their fourth quarter earnings in February, every shareholder, or potential shareholder, needs to take hard look at what management said they were going to do at the beginning of 2014, and compare it to what they actually did.

However, since combing through a year’s worth of data can get time consuming, I’ve taken the liberty of picking out five of Annaly's CEO Wellington Denahan's most important promises, insights, and predictions from the beginning of last year. Let’s see how she did. 

1. Rates will stay low
“We do not think that the economic backdrop is going to afford the Fed a hasty exit from its low rate policy.”

A year later and we are still dealing with the same question: When will the Federal Reserve increase short-term interest rates? Which means, Denahan was right.

But this is not just an I told you so moment, Annaly acted on their feeling by reducing interest rate swaps. These assets act as protection against the Fed increasing interest rates, but they can also get pricey. So, by reducing these assets 40% over 2014, Annaly was able to maintain their core earnings and keep their $0.30 per share dividend stable throughout the year. 

2. Long-term rates will fall 
“Looking ahead, I expect the market to be more concerned with contraction risks than extension risk.”

Contraction and extension risk have to do with prepayments, or how fast borrowers payoff their mortgage. While both risks come with their own unique headaches, predicting that contraction risk would be the major concern suggests that long-term mortgage rates will fall and borrowers will payoff their mortgage faster.

This was a fairly bold assumption considering 30 year mortgage rates rose 34% in 2013. But, again, Denahan was on point. Over the course of 2014, mortgage rates fell 15%. 

More importantly, Annaly adjusted their portfolio to take advantage of falling rates, and saw unrealized gains on their investment securities of $1.8 billion over the first nine months of 2014. 

3. Waiting for opportunities
“[W]e intend to opportunistically add to our position over the next few quarters.”

Annaly's chief asset class, mortgage-backed securities, totaled $70.4 billion at the end of 2013. As Denahan suggested, the company slowly added to its portfolio over the course of the year which stands at $81.5 billion as of September 2014. 

4. Commercial Real Estate
“We expect to continue to prudently grow the commercial position”

In a bit of a shocking twist, Annaly acquired CreXus in January 2013. Since Annaly had historically only invested in residential mortgage debt, the move into commercial real estate debt was a bit of a surprise. 

The question became: How aggressively will Annaly pursue this new venture?

Annaly started 2014 with $1.6 billion in commercial investments, and has $1.6 billion as of September 2014. Not exactly explosive growth, but on the plus side, I would say keeping investments flat counts a prudent.

5. New avenues of opportunity
“As we allocate capital across the agency and commercial investment spectrum we also consider share buybacks, buying other REITs, investing in MSRs, among many other things.”

Immediately following this remark, Denahan explained why they would not be doing any of those things. For instance, Denahan suggested that buying assets would create a better return for shareholders than buying back shares. Also, to protect against rising long-term interest rates, mortgage servicing rights, MSRs, were becoming popular among REITs, however, Denahan noted that their investments in interest-only securities were a better value and accomplish the same task. 

As an investor, all you can hope for is that the CEO will be open about what they are thinking and coherently justify what they are likely to do. Denahan did that. So, it was not surprising that Annaly did not buy back shares, buy stock in other REITs, or invest in MSR during 2014. 

Report card 
Annaly's management was open and honest about their intentions for 2014, they had a firm grip on the upcoming environment, made an accurate prediction about the Federal Reserve and interest rates, and made beneficial adjustments to the company's portfolio.

While there is still one quarter's earnings to go, I believe investors should feel a little more confident knowing that Annaly has not only been accurate with predictions, but upfront with their shareholders about their plans for the future.