Global Asset Allocation Strategy for HNWI

In the context of global asset allocation, consider the case of a high-net-worth individual (HNWI) who is currently based in the United States but has a strong interest in diversifying their investment portfolio on a global scale. The individual has a risk tolerance that is moderate to high and is looking for strategies that can effectively integrate global markets into their investment portfolio.

Discuss the strategic considerations the HNWI should take into account when deciding on global asset allocation. Specifically, address the importance of economic fundamentals, currency risk, geopolitical factors, and the implications of using hedge funds or other alternative investments in non-U.S. markets. Analyze the potential benefits and drawbacks of a fully integrated global portfolio versus a regionally diversified portfolio.

In your response, provide a comprehensive recommendation for the HNWI’s asset allocation strategy, including specific asset classes and geographic regions to focus on. Justify your suggestions with relevant data and theoretical frameworks where applicable.