Importance of Continuous Portfolio Monitoring

As a portfolio manager, you are responsible for monitoring a client’s investment portfolio to ensure alignment with their financial goals and risk tolerance. You notice that one of the portfolio’s asset classes has significantly outperformed others, causing a shift in the overall asset allocation. Discuss the importance of continuous portfolio monitoring in relation to the client's objectives, and outline the steps you would take to assess whether rebalancing is necessary.

In your response, consider factors such as risk exposure, market conditions, and the client's objectives. Provide a detailed analysis of how failure to monitor the portfolio effectively could impact the client’s long-term financial goals.