Strategic Asset Allocation for a Moderate-Risk Entrepreneur

As a portfolio manager for a client with a unique set of financial goals, you have been asked to create a strategic asset allocation (SAA) plan for Lila, a 55-year-old entrepreneur looking to balance capital preservation with growth opportunities. Lila plans to retire in 10 years and wishes to maintain her current lifestyle throughout retirement. Her investment portfolio is worth $3 million, and she expects to withdraw $120,000 annually during retirement. After discussing her risk tolerance, you determine she has a moderate risk profile, but her overall investment outlook is optimistic due to her entrepreneurial spirit. Additionally, Lila has a strong interest in sustainable investments, which she hopes to incorporate into her portfolio.

In your response, provide a comprehensive strategic asset allocation plan that includes specific asset classes and their corresponding weightings. Justify your decisions based on Lila's financial goals, risk tolerance, investment horizon, and preferences for sustainable investments. Additionally, discuss how you would adjust this strategic asset allocation over time as Lila approaches retirement.