Advanced Asset Allocation Implementation for High-Net-Worth Clients

Jessica had built a well-diversified portfolio for her high-net-worth client, which included a mix of equities, fixed income, and alternative assets. Following a recent market downturn, she is now tasked with reevaluating the asset allocation strategy to enhance risk-adjusted returns. The client’s investment objectives are aggressive growth and wealth preservation, with a 10-year horizon.

In light of these circumstances, address the following:

1. Discuss the factors that should be considered in the asset allocation decision-making process in this context.

2. Propose an implementation plan for the adjusted asset allocation that integrates both strategic and tactical asset allocation strategies.

3. Evaluate the potential risks associated with the proposed asset allocation changes and suggest mitigation strategies.