Is Equity Duration A Useful Concept?

Equity Duration: Long or Short? Equity duration has, until recently, kept a low profile relative to its famous bond related counterpart. But now a controversy about equity duration has erupted. While both logic and analysis suggest that equity durations are relatively long… in the 20 year range, there have been recent suggestions that equity durations are short… in the 2-6 year range (2). What is this controversy about? How can equity durations be simultaneously long and short? This article offers a resolution. It shows there really is no contradiction between the old view and the new. It is all a matter of definition and application.