The last 12 months have been very tough on traders, financial planners, and investors alike. Stocks have been annihilated, especially those in the financial sector. Think of any global financial institution -- Citigroup, UBS, Barclays, the Macquarie Group, just to name a few -- the value of these shares sank by at least 100 percent in 2008.
Additionally, the other major bubble to burst was the commodities sector. The price of crude oil has dropped over 70 percent from its peak at $147 a barrel back in the summer of 2008. And copper, aluminum, gold and iron ore prices have also dropped sharply.
Frozen credit around the world together with no global demand for goods such as cars will do the trick every time.
Will things get better this new year when the news seems to be getting worse around the world everyday? Layoffs are increasing quite dramatically. Businesses are going down one by one. The latest scandal to hit the headlines -- the CEO of India's Satyam Computer Services resigning after disclosing that profits had been falsely inflated for years.
In these turbulent times, how can investors navigate their way through the global markets? Is it possible to chart your way through recessionary waters or can you rely on basic fundamental analysis?
We put these questions to two experts, Michael Yoshikami, chief investment strategist at YCMNet Advisors and Daryl Guppy, CEO of guppytraders.com.
According to Yoshikami, fundamental analysis focuses on examining information and trends related to a company's current position in the market place. It also examines macro trends and assesses their impact on a company or industry’s outlook.
"Fundamental analysis has been the foundation for investment assessment for decades. It is used by Warren Buffet and most Wall Street analysts," Yoshikami says. "This type of research seeks to understand how cash flows from a company in relation to it's share price. It is a method of determining if the share price outlook is justified by its financials."