Strategic Asset Allocation for Moderate Risk Client

Alice is a financial planner who is constructing a strategic asset allocation for a wealthy client, Robert, who is 55 years old and plans to retire at 65. Robert’s primary goal is to ensure a stable income during retirement while still achieving capital appreciation. He has a moderate risk tolerance and a current investment portfolio primarily held in domestic equities.

Alice considers several strategic asset allocation options, each with different levels of exposure to equities, fixed income, and alternative investments. She is particularly focused on how the allocations will perform under varying market conditions, including economic downturns and periods of growth.

What is the most appropriate strategic asset allocation approach that Alice should adopt for Robert's portfolio, considering his goals and risk tolerance?