2016 is shaping up to be a volatile year for financial markets. In order to get an understanding of how major asset classes will perform this year, let's review their performance in 2015.

Courtesy of Foundation Investing; price data from Yahoo Finance

2015 was not kind to equities. The so-called "FANG" stocks, which consist of Facebook, Amazon, Netflix and Google (now Alphabet) were the only high-profile gainers. Investors bought them in size at the beginning of the year and rode them all the way up. We tried to hop on the same momentum train but exited at break-even when we didn't see enough follow through by year end. Despite the success of FANG's, most index investors lost. Even a majority of high-profile hedge fund managers struggled in 2015. Billionaire investor Bill Ackman's Pershing Square Holdings finished down 20.5% for the year. And Warren Buffett's Berkshire Hathaway lost 12%.

Treasury securities lost money as well. With low interest rates and a Federal Reserve tightening cycle at the top of everyone's mind, bonds have had a hard time breaking out.

The fall in the junk bond market was not a surprise. Plummeting oil prices have killed a lot of energy companies, and now they're struggling to service their debt. Further downside and defaults are likely. To make matters worse, many investors were pressured a few years ago to buy into junk bonds to increase the yield on their portfolios. Instead of earning 1% - 2% on government bonds, they "reached for yield" and bought junk. These investors, hands forced by the Fed's zero interest rate policy, are all underwater. Watch for even more of them to puke at the lows. We look forward to digging into the long side of this battered debt market when the dust settles. There will definitely be some quality buys at bargain prices.

Gold continues to underperform, along with the rest of commodities, hanging near recent lows. Perhaps it will excite the market in 2016, but until then, watch for it to trade sideways.

Those who bought the dip too early in oil suffered the most. They got smoked. We have had a short position in oil since the beginning of November. We continue to see headwinds and an oversupplied market until at least mid-2016. There will come a time to swoop in and buy up oil, but trends often last much longer than what people anticipate. This is why we don't pick bottoms or tops, but instead wait for price to tell us when an asset has decided to turn around. It could be years before oil rebounds significantly ... We'll let price lead us.

Emerging markets continue to disappoint. Investors have not seen new all-time highs since 2007. And now it looks like a trip back down to 2008 lows is more likely. Brazil is in depression territory. Russia can't keep it's head above water with oil prices so low, and China continues to fight a plummeting stock market while struggling to safely devalue its currency. We attempted to take a short position in emerging markets by selling short the iShares MSCI Emerging Markets Index exchange-traded fund in November but were stopped out on a sharp retracement. The ETF continued down without us, but that's part of the game. Right or wrong we must always respect our risk. 2016 will bring many more opportunities to take short positions in this ETF..

Real Estate stayed out of the news for most of 2015 and continues to trade sideways.

Lastly, Apple topped out after a nice run-up and continues to fall on China slowdown worries.

Markets are signaling that the raging bull cycle we've had the last few years has started to stall. Assets can't rise forever, and with stocks as rich as they are, forward returns look paltry. We talked about the death of the bull in this article.

Most investors look at table above and lash out in anger or frustration. It's never fun to open up the year-end brokerage statement and find out you're down money after suffering a roller coaster of volatility.

Foundation Investing differs. We embrace volatility. We profit from it. Our core strategy has the ability to go both long and short in any market. It doesn't matter if it's stocks, bonds, commodities or currencies. We go everywhere and trade everything.

When things get wild and move fast, we thrive.

Our portfolio stays calm because we control our level of exposure at all times. If markets are choppy with nothing compelling -- we stay out. When opportunity presents itself -- we strike in size.

We look forward to a 2016 full of volatility.

This article is commentary by an independent contributor. At the time of publication, the author was short oil, short EEM, and short AAPL.