We finally made it. After months of searching, planning, budgeting, and worrying, we finally made the big move this past weekend.

I’ve mentioned before that my wife and I made the decision to pull up our stakes and move out to the country. And not a minute too soon… available homes on the market are scarce, with prices soaring, and mortgage rates creeping up.

According to the Mortgage Bankers Association, the average 30-year mortgage rate is now 4.8%, shooting up by the most in a decade last week (and the highest since December 2018).

For the year so far, mortgage rates have climbed by nearly 1.5 percent. That’s the fastest advance since 1994.

While it’s true that mortgage rates remain relatively low by historical standards (remember the days of 12% mortgages in the ’80s, anyone?), one has to wonder how much the housing market (and homebuyers) can take from such a rapid advance.

Remember, the conventional 30-year mortgage rate is correlated to the 10-year Treasury yield. Historically, you can expect a 30-year mortgage to trade about two percent (give or take) above the 10-year. So as the 10-year yield goes up, so do mortgage rates. And lately, bond market investors are not enamored with the 10-year, sending the yield well above 2% (remember, as the price goes down, yields go up, and vice versa).

_{Source: Federal Reserve Bank of St. Louis}

The reason for the bond selloff is simple. Bond investors are positioning for more aggressive action from the Federal Reserve to rein in inflation, which is running at its hottest rate in 40 years. In fact, Fed Chair Jerome Powell recently commented that the central bank is prepared to act faster and potentially even raise rates by more than the usual 25 basis points at a time.

We Called It, Did You Profit?

If you remember, we made a prediction about the bond markets in 2022 as a part of our annual investment predictions report:

Interest rates will surge in 2022, slaughtering bonds, and devastating millions of unprepared income investors. If the bond market crashes, that’s bad news for everyone — even if you don’t own bonds. There are few escape routes from the bond debacle that the average investor is familiar with. But we’ve found a handful of obscure lifelines that could make 2022 the most lucrative year of your life.

I covered our central thesis in some detail in this article. And so far, our call to “short” Treasury Bonds has been spot on (meaning if bond prices fall, and yields go up, then you make money)…

In that article, I mentioned that there is a way for investors to “short” Treasury bonds without having to be a savvy Wall Street trader. In fact, we said there were two exchange-traded funds (ETFs) that we liked that do all the work for you.

You simply buy one of these funds, which give you short exposure to long-dated Treasuries, and profit.

But you have to remember that things are a little different in the world of bonds. A 1% move is a pretty big deal, for example. So in our usual fashion of “bold” predictions that are a little outside of the box, both of our ETF recommendations were leveraged, which means they will move more dramatically than the underlying market. So generally speaking, a 1% move in the markets should translate into a 2% or 3% move with these ETFs.

You can see how that’s worked out for investors who followed our recommendation. One of our recommendations, the Proshares UltraPro Short 20+ Year Treasury ETF (NYSE: TTT), is already up 33% this year (and has spiked as high as 42%)…

Remember, these leveraged short ETFs are typically designed for short-to-medium-term trades. And they do carry some risk. That said, there could still be plenty of life left in this trade if you want to take a flier.

In the meantime, go here to get more details on the rest of our predictions right now.

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How Buffett Used This “Cash On Command” Strategy To Earn Millions

Did you know that Warren Buffett has used a special strategy that gives him the chance to buy high-quality stocks for less than the current market price? Even more amazing, if the tool “fails” to get him a bargain, it will pay him cash for his trouble anyway.

We’re not talking about any sweetheart deal that only the rich and powerful have the “juice” to pull off behind closed doors. And if you think this is some kind of super-sophisticated strategy, think again. It’s incredibly simple. Yet around 75% of “buy and hold” investors have never even tried it, according to a TD Ameritrade survey.

That’s a shame, because it’s proven to be a secret weapon for reducing exposure to market volatility, preserving capital, and generating income…

So what is this bargain-hunting, income-generating tool that’s served Buffett well all these years? It’s the same one that my colleague Robert Rapier’s followers use over at Rapier’s Income Accelerator to earn hundreds (sometimes even thousands) of dollars with each and every trade…

How Buffett Pocketed $7.5 Million Instantly

The King of Buy-and-Hold first bought stock in Coca-Cola (NYSE: KO) in 1988. At the time, Buffett said he expected to hang on to the shares of this “outstanding business” for “a long time”. Today, with more than $24 billion invested in 400 million shares, Coca-Cola remains one of Buffett’s top five largest holdings.

​But Buffett is not the type of investor who’ll buy shares of a company at just any price — not even Coca-Cola.

The world’s greatest investor is a bargain hunter. If Buffett likes a company but thinks the price is too high, he may wait until the market “cooperates”. In other words, wait for the price to go lower before he’ll buy shares.

And that’s where options come into play.

In April 1993, Buffett wanted to buy more shares of his beloved Coca-Cola stock. (This story comes form Chapter 34 of Andrew Kilpatrick’s book: Of Permanent Value: The Story of Warren Buffett.)

The problem: Coca-Cola was trading at about $39 a share. That price was too expensive for his taste at the time.

But did the self-made billionaire let his cash sit idle while waiting for a downturn? Not a chance. Buffett used this strategy to earn himself $7.5 million in income — all without buying or selling a single share.

Here’s how he did it. Buffett thought $35 would be a reasonable price for Coca-Cola. So he wrote a contract for the 5 million shares he wanted to buy at that price.

In exchange for this contract, Buffett in this instance received a payout of $1.50 per share. In other words, he was given $7.5 million in cash up front for his trouble. ($1.50 per share x 5 million shares = $7.5 million.)

From here, two scenarios could have played out for Buffett:

1. Coca-Cola’s stock falls below $35 per share by the time of expiration. The buyers exercise those options and sell their shares to him. That way, Buffett buys Coca-Cola at $35, which is precisely what he wanted to do in the first place. He would get the shares for 10% off.

2. Coca-Cola’s stock rises (or stays the same) during the life of the contract. The owners let the contract expire, and Buffett simply pockets the $7.5 million and walks away.

The second scenario is just what happened. Buffett received $7.5 million in instant income for the chance to buy shares of Coca-Cola at $35. Said another way, he earned the equivalent of a 3.8% yield ($1.50 for each $39 share) over a matter of weeks, without even having to buy the stock.

The Takeaway

Now, Buffett could have simply waited for Coca-Cola to fall in price to $35 before he bought them. That’s what many ordinary investors do every day. But then again, Buffett is no “ordinary” investor…

By using this strategy, Buffett set himself up for success either way. He gave himself the chance to either buy a quality stock at the discounted price he wanted, or, pocket the premium income as soon as he wrote the contract.

This is about as close to a “win-win” strategy as an investor can get.

The best part is, you can set yourself up for a win-win like this time and time again. And you don’t have to be a billionaire investing guru to benefit from using this strategy — you just have to act like one.

If you want to learn more, my colleague Robert Rapier has just finished a report that details how this works. A veteran income hunter, Robert and his subscribers over at Rapier’s Income Accelerator have using strategies like this to earn hundreds (even thousands) with each trade. And then, they turn around and do it again the very next week.

If you’d like to learn more about generating income using strategies like this, simply follow this link.