Evaluating Portfolio Strategy Amid Business Cycle Fluctuations

Your client, a high-net-worth individual, is concerned about how the current business cycle may affect their investment portfolio. They have a diversified portfolio comprising equities, fixed income, and alternative investments. In light of the current economic environment, characterized by rising interest rates and inflationary pressures, evaluate the potential impacts of the business cycle on the client's portfolio. Discuss the strategic adjustments that could be made to optimize returns and mitigate risks during different phases of the business cycle.

Additionally, identify the leading, lagging, and coincident indicators that could assist in the analysis of the current business cycle stage. Conclude with a recommendation on whether the client should maintain, reduce, or increase their current investment allocations in various asset classes depending on your analysis.