Developing a Market Risk Management Strategy

As a portfolio manager at a boutique investment firm, you are tasked with developing a risk management strategy for a mixed-asset portfolio that currently includes equities, fixed income, and alternative investments. Given the current economic environment characterized by rising interest rates, volatility in global equity markets, and geopolitical tensions, investor sentiment is increasingly bearish.

In your memorandum to the investment committee, discuss how you would address market risk in this portfolio. Specifically, outline the methods you would employ to assess the potential impact of market movements on the portfolio's value and detail the strategies you would implement to mitigate this risk. Be sure to incorporate concepts such as beta, correlation, diversification, and hedging techniques in your response.

Additionally, explain how you would engage with the investment committee to align your risk management strategy with the firm’s overall investment objectives and client preferences.