What Is Separation Property?
Separation property is a theory that is often used to determine the focus and content of an investment portfolio. The theory essentially addresses two key components within the portfolio, and can be applied to any investor’s situation, since these components are considered universal. Proponents of this approach claim that using the separation property model makes it easier to compile a functional portfolio that is likely to help the investor achieve his or her financial goals. By separating the two components and considering each one in turn, it is considered possible to achieve a more balanced portfolio that is capable of producing equitable returns over the long term.
