Moderate Risk Asset Allocation Strategy for Client with Income Needs

As the Chief Investment Officer (CIO) of a mid-sized wealth management firm, you are tasked with developing an asset allocation strategy for a newly acquired client with a moderate risk tolerance, a 15-year investment horizon, and specific liquidity requirements. The client has a portfolio value of $2 million and expresses a desire for both capital appreciation and income generation. Additionally, the client anticipates needing to withdraw $100,000 annually for living expenses starting in one year.

Considering these factors, outline an asset allocation strategy that balances the client's income needs with growth potential. Discuss the rationale behind your chosen asset classes, the proportion of the portfolio you would allocate to each asset class, and how you would implement this strategy. Furthermore, address the considerations for rebalancing the portfolio over time, including any adjustments needed as market conditions change or as the client approaches retirement.