Strategic Asset Allocation for a Moderate Risk Client

As an investment advisor, you have been approached by a client who has recently received a substantial inheritance and is looking to invest the funds wisely. The client has a moderate risk tolerance and desires a balanced approach to asset allocation. They have expressed an interest in both growth and income-generating investments.

Considering the principles of Strategic Asset Allocation, outline a strategic asset allocation plan that you would recommend for this client. Discuss the rationale for your asset allocation choices, taking into account the client’s risk tolerance, investment horizon, and market conditions.