July is a month of harvest, riding on the expectation of interest rate cuts.

They say that after a difficult and hopeless period, there will be a turning point in July following the improvement of PCE, CPI, and non-farm data.

Although since January of this year, there have been constant calls for a Fed interest rate cut, but like the story of "the boy who cried wolf," the stubborn inflation numbers in Q1 of 2024 caused the yield on the 10-year Treasury note to drop to 3.8% and then quickly rise to a high of 4.74%.

My investment goals are largely influenced by FED interest rates. In short, if rates are lowered, bank stocks may be negatively affected due to a decrease in interest spreads, but treasury bond ETFs and REITs may benefit from the rate cut.

Although the June non-farm payroll data was unexpectedly strong, the model used for non-farm payroll has an overvaluation issue. However, based on the observation of small non-farm employment data, US consumer data, and used car prices, I found that the overall trend is positive, and I estimate that the PCE and CPI data released in July should further improve. So I made two plans:

1. At the end of June, when N2IU was in a long-term low price range, I bought it at 1.22 on margin. Then, when good news was released about PCE and all REITs skyrocketed, I sold a portion of the shares purchased on margin in the range of 1.3-1.34 to expand credit purchases.

2. Next, because CPI, small non-farm employment data, and FOMC meetings and speeches will be announced this week, if we look at the market's general expectation of a 2-3 basis point rate cut this year, I determine (with some luck involved) that the US 10-year yield has the opportunity to decrease from the previous 4.2% to around 4.0%. Taking into account my previous experience of testing TMF (a triple leveraged ETF of long-term US treasuries) with small amounts of money twice, I decided to expand credit again (considering both fund shortages and my maximum risk tolerance, and setting stop-loss points) and gradually acquire it below $50 per share. The target is a return rate of 5-6%. After the release of small non-farm data and before the Fed press conference on 7/31, the US 10-year yield did indeed decrease to around 4.0%, so I sold it in batches to achieve the set return rate target (approximately 6%).

As of 8/2, my leverage ratio has been reduced to below 1. The actions taken in July were only based on the expectation of a rate cut (combined with the June data) and a bit of luck, allowing me to achieve my set goals by increasing leverage. In August, I plan to return to my original investment portfolio, at least wait for the release of the August non-farm payroll data before making the next plan.

By the way, I am not a long-term risk-loving investor. The majority of my investment portfolio is focused on high dividend, low-risk blue chip stocks. The actions taken in July were just an opportunity that seemed favorable after analysis, and short-term operations require a bit of luck. Wishing all mooers successful investments.