Following on from a stellar 2013, investors' hopes were high for the new year with some economists forecasting the index to climb as high as 6000 points.
Instead, it has been a disappointing start to the year with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) falling for four consecutive weeks to record its worst January in four years.
The market experienced a fall of 2.9% over the month as the US Federal Reserve continued to taper its bond-buying program that has been fuelling global liquidity in recent years.
Chinese manufacturing data also played on investors' confidence with signs that demand for Australia's iron ore and coal exports could fall. This has, of course, impacted commodity prices with iron ore falling from US$134.20 a tonne to US$122.60 a tonne with further falls predicted.
As a result, BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) fell 3.7% each, while Fortescue Metals Group Limited (ASX: FMG) plummeted 8.4% over the course of the month.
Meanwhile, Australia's major banks have also experienced a setback since the beginning of the year, after driving the market up 15% in 2013. Each of the banks appear to be overpriced currently and investors will await their upcoming half-year results to determine whether earnings growth will support current share prices.
Australia and New Zealand Banking Group (ASX: ANZ) fell the most with its shares conceding 5.9%, while Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB) each fell between 3.8% and 4.2%. Telecommunications giant Telstra Corporation Ltd (ASX: TLS) also fell 2.5%, finishing the month trading at $5.14 per share.
The worst performing sector for the month was consumer goods and services which experienced a 4.5% plunge as a number of retailers released rather disappointing results. The Reject Shop Ltd (ASX: TRS) and Super Retail Group Ltd (ASX: SUL) dumped 35.3% and 19.4%. Even JB Hi-Fi Limited (ASX: JBH) which released a rather impressive trading update couldn't escape the market's wrath, falling 16.3%.
From the top 200 companies, Ten Network Holdings Limited (ASX: TEN) was the best performing stock with a 26.8% gain (largely thanks to its strong Big Bash cricket ratings), while Forge Group Limited (ASX: FGE) was the worst, plummeting 26.3%.
Foolish takeaway
Particularly after such a bullish run, it's not abnormal to be feeling flat after a fairly bearish period. While there is no way of knowing whether there are further losses around the corner, investors can be sure that there are stocks trading at heavy discounts just waiting to be picked-up.
