Imagine you are a portfolio manager for a high-net-worth individual who has expressed significant concern about potential market volatility in the upcoming year. They currently have a target asset allocation of 60% equities, 30% fixed income, and 10% alternative investments. However, your analysis suggests a need for a tactical asset allocation shift in response to macroeconomic indicators, upcoming geopolitical events, and shifts in monetary policy.

Detail a tactical asset allocation strategy that addresses the client’s concerns while optimizing their expected returns. Discuss your reasoning for any proposed allocations relative to the current target, including specific asset classes you would overweight or underweight and your justification for these decisions. Address risks associated with the tactical shifts and how they align with the client’s investment goals and risk tolerance.