This summer, I wrote to you with a somewhat controversial opinion…

As I explained at the time, interest rates had been on the rise, causing the price of Treasury bonds to trade lower.

Most investors were steering clear or even shorting Treasurys at the time. But I saw an opportunity with bonds trading at such steep discounts.

And I recommended that you start getting exposure to these investments while they were still cheap. 

Hopefully, you took my advice, because it wasn’t long before long-term bond prices rebounded from their lows and started trading higher.

The ETF that tracks the price of long-term bonds has gained 9% in November, and Treasurys just wrapped up their best month since the 1980s.

If you didn’t pull the trigger on buying bonds, however, it’s not too late. I believe prices have even further to run over the next few months.

But you’ll want to act quickly, because this window of opportunity is closing soon. Read on below for all the details…

The Unique Opportunity for Treasury Bonds

As you probably know, interest rate hikes have been a big news story for a while now. Until recently, it wasn’t clear how many more times the Fed would continue raising rates.

After all, the economy was holding up with less risk of recession and inflation still presented a significant concern…

Meanwhile, Fed meeting minutes continued to show that some members were still hawkish even after the long series of rate hikes.

As rates continued to climb, Treasury bonds, which typically have an inverse relationship with interest rates, traded lower. Of course, the rate hike cycle couldn’t last forever.

When the Federal Reserve was satisfied with its progress in combatting inflation, it would begin to ease up. Sooner or later, it would also eventually lower interest rates again.

And when this happened, bond prices would rebound. As I explained in September, I believe that time has finally arrived.

Inflation may still be a major problem for our economy and individuals alike, but it has slowed down.

It’s also likely that we’ll see some political pressure to lower rates, considering high interest makes our country’s debt very expensive.

So I think we’ll probably start to see rate cuts in the next year or two, especially if the economy shows signs of weakness. 

That means now is the time to buy long-term bonds. Not only will you lock in a high yield, but your bonds will also rise in value as investors begin to anticipate rate cuts.

If you’re new to buying bonds, here are a few things to keep in mind…

Understanding the Basics of Buying Bonds

When you buy a Treasury bond, you're buying a guarantee backed by the full credit of the United States, which pays you as an investor based on a predetermined schedule.

For instance, a 20-year Treasury bond with a 2% coupon would send you a 1% (or $10) payment twice a year and give you back $1,000 at the end of the 20 years.

This schedule is fixed, which is why bonds and similar investments are considered fixed-income assets.

No matter what happens to interest rates, the existing bond will still pay 2% every year and still mature at $1,000.

If long-term interest rates are near 2%, you'll probably be able to buy the bond somewhere close to $1,000.

That's a fair price because you'll receive 2% payments for 20 years. And you'll get your $1,000 back when the bond matures in 20 years. In other words, pretty standard.

But what happens when long-term interest rates increase, say to 5%? How do existing long-term bonds perform then?

Well, since bonds don't change their payment schedule, the only thing that can change is the market price for the bond.

In this case, the bond price would have to drop substantially.

That way, a new buyer would get the $10 payment twice a year, the $1,000 payment when the bond matures, and a total annualized return of 5%.

For long-term bonds, the price can decline substantially to adjust for a much higher long-term yield.

That’s exactly what led to today’s opportunity to buy bonds at a steep discount while locking in a reliable yield.

More Bang for Your Investment Buck

Now that long-term interest rates have moved sharply higher, investors like you and me can get great discounts buying long-term Treasury bonds.

And if interest rates pull back in the next few years, these long-term bonds will be worth much more than you’d pay today.

Meanwhile, the bonds are still contractually obligated to pay you the fixed income along the way and give you $1,000 when the bonds mature.

My recommendation for a long-term income play is to start accumulating some long-term Treasury bonds.

I prefer the actual bonds compared to a fund, that way you'll know exactly what your coupon payments will be and when your bonds will mature, paying you $1,000 per bond.

With interest rates now above the rate of inflation, you're getting a great deal on the investment.

And the potential for lower interest rates means that your bond could quickly surge higher once rates start falling.

This would give you a chance to sell early at a higher price and reinvest the money into other opportunities that the market gives us.

As I mentioned earlier, this window of opportunity won’t last long. Long-term bond prices are already rising.

So you’ll want to act quickly to make sure you can profit as bond prices continue to climb higher.