Can you believe it – we are nearly one quarter of the way through the year 2014 already!
With that in mind, although it could be considered a waste of time examining the market in detail on a daily basis to determine why the market has moved backwards or forwards a notch (usually, whatever you will find is completely immaterial to a long-term investment case), it can be useful to review the events that have affected its performance over a longer stretch of time.
This can help you to identify opportunities that the market may be overlooking and enable you to take advantage of any short-term market blips.
A review
While it was smooth sailing for the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) for the most part of 2013 (save for a temporary dip between May and June), it's been anything but so far this year.
The market got off to a very shaky start, enduring its worst January in four years which saw the ASX 200 plunge a little over 3% on the back of concerning Chinese manufacturing figures as well as tapering from the US Federal Reserve.
It went on to rally in February as Australia's largest companies joined together to deliver a series of solid earnings results. Particularly impressive were the results of BHP Billiton Limited (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS), which each played an important role in boosting investor sentiment.
Unfortunately, volatility has returned to the marketplace in an even greater capacity over the course of March. Growing tensions between Russia and the Ukraine, concerns emerging from China, plunging iron ore and copper prices and a shaky recovery in the US have all impacted the performances of equity markets around the world.
The ASX 200 is currently sitting around 0.4% lower for the year.
Outlook
As is always the case, it is impossible to tell which direction the market will go over the next month or year. Some analysts have stuck by their convictions that the market will hit 6,000 points at some stage in 2014 (indicating a 12.4% upside from today's level) while others, like Jeremy Grantham, have predicted that equity markets are headed for a crash unlike any other.
All we know is that in the long-run, the markets will rise, and that now is the perfect time to be buying quality companies at reasonable prices.
Foolish takeaway
While the market has fallen roughly 0.4% so far this year, some of the best companies on the ASX have also fallen in price (and therefore, increased in value to you), including Coca-Cola Amatil Ltd (ASX: CCL), Collection House Limited (ASX: CLH), Telstra and Village Roadshow Ltd (ASX: VRL), presenting you with a fantastic opportunity to buy them at a sweet discount.
