Analyzing Asset Allocation in Late Expansion Phase

As an investment analyst at a wealth management firm, you are tasked with analyzing the current state of the economy to inform your clients' portfolio strategies. The economy is currently at a late expansion phase of the business cycle, characterized by rising inflation, increasing interest rates, and labor market tightness.

Discuss the implications of the late expansion phase on asset allocation decisions, including how different asset classes may perform and how investors should adjust their strategies. Support your analysis with relevant economic indicators and provide specific recommendations for both conservative and aggressive investment portfolios.