Duration is a fundamental financial concept, but it’s more part of the fixed income investor toolkit than the equity investors’. For reasons I’ll get into, duration is usually a misleading concept for equity investors, but there are a few cases where that’s changing.

Duration in bond investing refers to two different measures, which are, conveniently, measured roughly the same way:

  1. The weighted average time in the future at which a bond pays its returns — i.e. the number of years from now when you’ll realize half of the net present value of the bond, and
  2. A bond price’s sensitivity to changes in interest rates, all else being equal. …

About

Byrne Hobart

I write about technology (more logos than techne) and economics. Newsletter: https://diff.substack.com/

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store