I am unable to understand logic behind this…. why an investor prefer bond with high duration when interest rate is expected to fall?? “a long-duration strategy describes an investing approach where a bond investor focuses on bonds with a high duration value. In this situation, an investor is likely buying bonds with a long time before maturity and greater exposure to interest rate risks. A long-duration strategy works well when interest rates are falling, which usually happens during recessions.”
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We know ,Price effect overwhelms reinvestment effect in case holding period is less than duration .
So, when we expect interest rates to fall , we search for a bond with high duration , So that we would be in favorable position due to price effect and we can earn by selling the bond prior to duration period.
Hope it helps !
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