Financial Outlook for the New Year

The Year 2008 can be considered to have been very challenging in more than one way. During the first half of 2008, the world experienced record breaking rise of fuel prices. Everything else also seemed to rise since the price of fuel has affected the cost of transportation.

From airlines to basic food, you have to add a few more dollars if you want to have something that you really need.

Everyone around the world except the oil making countries is clamoring for control. The only good news about the rising prices of fuel is that it has forced most consumers to save on fuel.

This practice was so widespread that it has driven the price of oil in the world market down. Today oil prices are on record breaking low that it is almost smart again to bring out your car for a road trip.

However, the price of oil in the first half of the year is not the only problem. The 4th quarter of the year 2008 has proven to be a lot harsher for the economy. The sub-prime mortgage crisis has reached its most critical state.

Different lending companies declared bankruptcy and the US government has spent hundreds of billions to save the lending industry.

The country of Iceland is even bankrupt because of the economic challenges it experienced.   The year 2008 ended with the Big Three Automakers pleading for help.

The New Year has ushered in a fresh start for everyone. However, this fresh start will never assure you of a great start. The New Year will only usher in a new start on certain things but the financial hardships will still be there. 

Businesses have also reported a slowdown in purchases even during the holidays. Since everyone is expecting a tough financial situation in the coming months, they are holding out in purchasing expensive gifts. Although there are still purchases this holiday season, the high end products are not as entertaining anymore.

Most experts agree that the economic hardships will never end fast. That means 2009 will still be challenging for everyone.

Recession will eventually subside and everyone will be able to rebuild but the first months of 2009 will never be friendly. Although the worst case scenario (Great Depression) will never happen, you have to be prepared.

If you have not experienced the hardships in 2008, do not be comfortable in 2009. One of the keys in surviving the hardships of recession is to be prepared.

This preparation however should not be on being able to save as much money as possible. There are certain aspects that you should cover as well in the coming year.

Effect on Different Industries

The combination of sub-prime mortgage and rising fuel costs, different industries have been hit hard in 2008. Specifically, financial companies and the automotive industry have reported significant damage that they are already in the brink of bankruptcy.

These are only the two industries that have clearly been affected because of the recent news.

There are however, additional sectors that did not clearly came out of the open telling everyone they are already in the losing end of recession.

For 2009, the challenge is on different businesses that are not offering essential services. The tourism sector which somehow been able to adjust to inflation and recession is highly threatened today. Businesses related to products and services that are deemed “luxury” is also threatened.

In your end, you have to be smart on dealing with these companies. Stocks and portfolios related to these industries are now considered as high risk. If you are working for these companies, ensure that you establish your worth so that you do not get cut in case people will be terminated to save the company.