Market bloodbath - time to go in?

After the market crashed yesterday, I went to take a look at my portfolio again. As expected, my US fund has plummeted; it is now down by 16%. My Europe fund was not much better at 13% in the red. China is down by around 11%, while Taiwan (which was already the worst performing in my portfolio) is now down 25%! Ouch. Thank goodness for my fixed income funds, which provided some measure of defence in my portfolio.

Core portfolio - 75.68%

Asia ex Japan Equity - 11.12%

Asia ex Japan Balanced - 5.10%

Emerging Markets - 9.20%

Europe Equity - 7.05%

Global Bonds - 7.19%

High Yield - 3.96%

Japan - 2.01%

Singapore Equity - 11.98%

Short Duration - 11.22%

US Equity - 6.85%

Supplementary portfolio - 24.32%

Global Resources - 4.51%

Taiwan Equity- 3.77%

Global Technology - 5.69%

China Equity - 9.01%

Russia Equity - 1.34%

By asset class, this would be 72.54% equity, 5.10% balanced, and 22.37% fixed income.

I have been doing some thinking these two months and have decided to move towards a smaller supplementary portfolio. Previously I categorised High Yield under my supplementary portfolio, but now I have moved it into my core portfolio. Will be trying to use new monies to rebalance my portfolio.

After US stocks crashed and S&P downgraded US debt from AAA to AA+, I decided to top up my US fund slightly. Why? I think markets have over-reacted. US companies are still making profits, with 71% of US companies outperforming expectations in Q2. Valuations are now extremely attractive, and markets have priced in the significant amount of bad news out there. 

I must admit that I was a bit nervous about topping up in US when everyone is fleeing from it. But I took one step back and asked myself - if a client came to me today and asked me for my opinions, what would I recommend? I would recommend topping up into US now, or start a RSP to take advantage of the market's volatility. Even if US drops further, it is undeniable that you would be getting a good deal in the medium term. After this, I felt more reassured and put in the trade. 

I also topped up into Japan slightly (more to increase my portfolio allocation in Japan than to exploit opportunities) and more into Short Duration funds for safety.