Strategic Asset Allocation in a Business Cycle Context

As a portfolio manager, you are tasked with evaluating the current economic environment in light of the business cycle and making appropriate asset allocation recommendations for a high-net-worth client. The client is heavily invested in equities and has expressed concern over impending economic downturns, as indicated by recent shifts in key economic indicators.

Using the provided economic data set, which includes GDP growth rates, unemployment rates, consumer sentiment indices, and inflation rates over the past five years, analyze the current phase of the business cycle. Based on your analysis, recommend a strategic asset allocation shift for the client's portfolio to mitigate risks associated with an economic downturn while still pursuing growth opportunities.

In your response, detail how the business cycle impacts asset selection and justify your recommendations with data points from the economic indicators provided. Consider both the short-term and long-term implications of your strategy.