Understanding Strategic Asset Allocation

John is an aspiring financial analyst who has recently completed his CFA Level 1 examination. He is now studying for the CFA Level 2 exam, focusing on portfolio management strategies. John learns about strategic asset allocation, which is a long-term investment strategy to achieve a specific risk-return profile.

As part of his study, he comes across the concept of setting target allocations for different asset classes based on factors such as investment objectives, risk tolerance, and market conditions. One of the key principles is that strategic asset allocation is often implemented through a mix of asset classes like equities, bonds, and cash equivalents.

Given this information, which of the following statements about strategic asset allocation is correct?