Short (Duration)
"Short (Duration)" refers to investments or financial instruments that have a brief time frame until maturity or expiration. These typically include bonds or loans that are set to mature in a few months to a few years. Investors often choose short-duration assets to minimize interest rate risk, as their value is less sensitive to changes in interest rates compared to long-duration investments.
In the context of bonds, short-duration bonds are generally considered safer and more stable. They provide quicker returns and allow investors to reinvest their capital sooner. This strategy is particularly appealing during periods of rising interest rates, as it helps to avoid potential losses associated with longer-term investments.