Asset Allocation Strategy Evaluation for Client

Sarah is a financial planner working with a high-net-worth client, Mr. Johnson, who has a substantial investment portfolio consisting of equities, fixed income, and alternative investments. Mr. Johnson has expressed concern about the potential volatility in the equity markets and is interested in reallocating some of his assets into a more conservative strategy.

As Sarah begins the process of asset allocation implementation, she considers various strategies to manage the portfolio's risk and return profile. She has three strategies in mind:

1. Implementing a dynamic asset allocation approach that allows for tactical adjustments based on market conditions.

2. Applying a constant mix asset allocation which maintains fixed allocations to equities, fixed income, and alternatives regardless of market changes.

3. Utilizing a strategic asset allocation that establishes a long-term target allocation and periodically rebalances the portfolio.

Which strategy would best align with Mr. Johnson's concerns about volatility while still aiming for a balanced long-term growth approach?