3min chapter

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Asynchronous Work & Effective Equity Duration (plus Reading Habits w/ Harley Finkelstein) (EP.215)

The Rational Reminder Podcast

CHAPTER

Equity Duration Matters for Portfolio Choice and Risk Management

The effect of equity duration can be viewed as the macaulay duration, whichis what we use for fixed income. The effective equity duration is adjusted by the comb movement between the discount rate and the expected future cash flow growth. If you have a five year time horizon and you get hit with market discount rates affecting the prices of your long duration assets, that can be very painful.

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