Reviewing 2008, Predicting 2009

You might look back at 2008 and say, "That year did what?!" Or maybe 2008 will become The Year That Must Not Be Named. Sure, 2008 was definitely memorable -- but when it comes to your portfolio, 2008 will probably not be among your fondest recollections.

For many investors and companies, 2008 was disastrous. Individual investors have seen their portfolios and retirement accounts take a horrendous beating. Consumer confidence is dropping, and foreclosures are mounting. Meanwhile, what started off as government intervention into JPMorgan Chase's (NYSE: JPM  ) purchase of Bear Stearns has ignited a stream of companies clamoring for government dollars.

Now, everyone from General Motors (NYSE: GM  ) and Citigroup (NYSE: C  ) to AIG and Fannie Mae has received bailout funds from the government. Heck, even farm-equipment maker Deere (NYSE: DE  ) and conglomerate General Electric (NYSE: GE  ) have received backing on their debt. Goldman Sachs (NYSE: GS  ) , Morgan Stanley (NYSE: MS  ) , and American Express (NYSE: AXP  ) even took the extreme measure of becoming bank holding companies, just to tap into government-allocated dollars. Wow -- who could have predicted that? And where do consumers sign up?

Spare some change for 2009?
2009 may or may not bring change. While many are hopeful that the arrival of a new U.S. president will improve matters, many more cannot deny the financial problems plaguing our country and the world. Depending on whom you talk or listen to, 2009 could be the year of opportunity, or the year of more financial doom and gloom.

Fools, we prefer to be optimistic. Tanking stock prices have left massive companies at undervalued prices not seen in years. With careful research and a few lessons from the mistakes of 2008, you can come out on top in 2009.

During the month of December, we've been reviewing 2008 and forecasting what 2009 will bring. You can see all of our coverage below. And stay tuned in 2009, as we'll continue to bring you your daily dose of Foolish analysis.

Cheers to a New Year and a fresh financial start!

Investing Lessons of 2008:

2008 in review:

Predictions for 2009:

Katrina Chan owns no shares of any of the companies mentioned. American Express is an Inside Value recommendation. JPMorgan Chase is an Income Investor pick. The Motley Fool owns shares of American Express. The Fool's disclosure policy is ready to bring on a new year with noisemakers and champagne.


Read/Post Comments (6) | Recommend This Article (56)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 01, 2009, at 12:36 PM, hegibson wrote:

    There are unhealthy ethical and moral cultural forces at play in the attitudes that are governing corporations, governments as well as consumers that have produced and will continue to produce chaos especially in the US economy. Unrestrained materialism, entitlement, consumerism and pragmatism are the engines driving the decisions that people make. In the move to adopt multiculturalism, western societies have jettisoned the truths that provided a stable morality and ethic, and have adopted amoral values which will eventually corrupt every aspect of society. Unrestrained freedom leads to anarchy, chaos and destruction. Generally speaking, human nature is not predisposed towards the "good," rather it is predisposed towards gaining advantage for self even if it means harm to others. We are too good at rationalizing anything and everything in order to get what we want. But what we want is not always what we necessarily need.

  • Report this Comment On January 02, 2009, at 11:05 AM, golfamatic wrote:

    hegibson's comments are very well taken. Every Fool needs to read Mr Bogle's book, "Enough". hegibson's words are certainly in that spirit.

    Too many wonderful companies in SP500 were punished by the sins of the financial sector. Let's look at INTRINSIC VALUE for cryin' out loud! When we do this, you cannot avoid the conclusion that certain companies being bailed out NEED TO FAIL!!! F and GM have nothing at all going for them. Crummy products, no business model/strategy except when Congress puts a gun to their head.

    Lets replace F and GM in SP500 with a couple of wonderfully run companies in the SP Completion Index. I am so sick of this country throwing good money after bad.

  • Report this Comment On January 04, 2009, at 2:00 AM, PoundMutt wrote:

    What are all the bailouts going to cost? $1 trillion? 2 or more $ trillion? And just what will those trillions get us? Who the heck knows???!!!

    What is the population of the US? 305,000,000? If the gov't. REALLY wants to save the economy, it should give EACH person $1,000,000, tax free! What would happen to the economy if $305,000,000 were spent on cars, appliances, paying off mortgages, buying new houses, vacations, sending the kids to college, etc...

  • Report this Comment On January 04, 2009, at 2:18 AM, PoundMutt wrote:

    Re the previous comment: I should NEVER do math at 2 AM!!!??? 305 million times $1 million is a ridiculous sum!

    How about $10,000 per head for a total of about $3.05 Trillion (is THAT correct?) We KNOW most of the people will SPEND their $Million on cars, appliances, paying off mortgages, buying new houses, vacations, sending the kids to college, etc... What will the bankers and Wall Street do with THEIR $Trillions? NOBODY knows!

  • Report this Comment On January 05, 2009, at 10:34 AM, jfenlon wrote:

    hegibson is correct. Karl Marx' and Engel's error was their belief that the end of capitalism would see an altruistic replacement in the form of a classless society guided by selfless individuals ensconced as the leaders of the communist party. What he did not allow for was the fundamental aspect of human nature that some will always lust for power and riches at the expense of their fellow men/women. Lenin established the dictatorship of the party followed by Stalin who established the dictatorship of an individual. Their type will always be with us, regardless of the political/economic structure in force. The failure of the watchdogs was not an oversight.

  • Report this Comment On January 07, 2009, at 10:01 AM, BlueLakeVentures wrote:

    2008 was challenging, and 2009 will be the transition year to recovery. My thoughts on how it will shape up and the best stocks at http://bluelakeventures.blogspot.com/2009_01_01_archive.html

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