Appropriate Strategic Asset Allocation for Robert

Medium Asset Allocation Strategic Asset Allocation

As an investment strategist, you are tasked with advising a client, Robert, who has a long-term investment horizon and is willing to accept moderate risk for potentially higher returns. Robert currently has a diverse portfolio with equities, fixed income, and alternative investments. His objective is to achieve a balanced approach to growth while minimizing volatility during market downturns. Robert has expressed a preference for a strategic asset allocation that aligns with both his risk tolerance and long-term financial goals.

Given Robert's situation, which of the following strategic asset allocation approaches would be the most appropriate for him?

Allocate 60% to equities, 30% to fixed income, and 10% to alternatives, focusing on growth.

Use an equal weight allocation of 33.3% to equities, fixed income, and alternatives to minimize risk.

Allocate 40% to equities, 40% to fixed income, and 20% to alternatives to balance returns and risk.

Hint

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