mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
From time to time I forget exactly what duration is, even though I know that is an important thing to follow regarding my FI allocation. This is a pretty good article on the subject. The higher the duration, the more interest rate risk.
https://www.etf.com/publications/et...tm_medium=email&utm_campaign=weeklynewsletterThe statistic used to measure this time-weighted interest rate risk is called “duration.” A higher time-weighted average—a higher duration—means more interest rate risk, and clearly it’ll take longer for you to get paid for a 10-year bond than for a five-year bond.
While duration can be calculated and expressed in different ways, at its core, it conveys the interest rate risk in a bond or a fixed income portfolio. Duration is literally an estimate of the change in a bond’s value in response to an overall change in interest rates.