Pete is 65 years old, married, and has three adult children. He is currently employed in the energy industry and earns roughly $1 million annually. He anticipates retiring completely from this position next year and relying solely on his portfolio to maintain his and wife's combined spending level of $400K annually. In addition to these portfolio assets, they also own a $2 million home in The Woodlands. Pete and his wife have no other financial assets or business interests. Beyond the value held in this portfolio, the only income they will receive is Social Security, which is not particularly impactful given their level of assets and spending. Global Allocation Preferred Stock 11% Cash 18% Cash 18% Preferred Stock 11% Tax-Exempt Investment Grade Bonds 25% 2% Taxable High Yield 3% Retirement Accounts: $1,695,800 Taxable Investment Accounts: $7,511,700 Schwab Checking Account: $1,217,150 Total: $10,424,650 Stocks 46% Domestic Large Cap 35% Taxable Investment Grade 20% Developed International 7% Domestic Mid Cap 1% Domestic Small Cap 1% Emerging Markets 1% Morningstar Equity Style Box % Morningstar Fixed Income Style Box % Total Stock Holdings Total Bond Holdings 28 23 41 3,934 0 0 0 14,821 % Not Classified % Not Classified 1 1 1 2 73 3 012 1 1 1 12 0 Value Blend Growth Ltd Mod Ext 0-10 10-25 25-50 >50 0-10 10-25 25-50 >50 Portfolio (%) Bmark (%) ++T 00>= { 4}} < Cyclical 31.65 33.21 Basic Matls 1.46 2.49 Consumer Cycl 9.80 12.24 Financial Svs 19.94 16.05 Real Estate 0.45 2.43 Sensitive 49.03 42.37 Commun Svs 3.31 3.47 Energy Industrials 6.39 5.22 7.51 10.19 Technology 31.82 23.49 Defensive 19.29 24.42 Consumer Def 9.47 7.64 Healthcare 8.95 13.55 Utilities 0.87 3.23 Not Classified 0.03 0.00 How could the diversification of the equity portfolio be improved? Provide one example of what could be changed and why