Business Plan

A variety of both positive and negative events will ultimately impact on the level of investment returns earned by investors.

A comparison between an objective measurement tool, available on the market and can be accessed by investors is the index. Let us discuss more about the index in terms of investment.

• Knowing Index

In the world of capital and financial markets we know the term stock price index, although the index is not monopolized by the stock market but also used in many other markets such as the bond market and the Forex market. It is actually not surprising since the first index used in finance and capital markets are the stock price index.

Index is a statistical indicator that shows the size change of a particular object. Stock price index will give an idea of the size of price changes in the stock market in a given period. An idea of how big the bond market moves up or down can also be obtained by observing the size of the change in bond price index figures.

If we know that the Corporate Bond Total Return Index set at number 100 on January 4, 2010 and we know the index numbers in the date of December 23, 2011 located at 123.2311, then we will know that Indonesia has the corporate bond market yield (return ) for investors of 23.23 percent during the period.

• Evaluation of Reference Investment

So, from the explanation above can be concluded that the index of the world’s capital markets and finance is an indicator of changes that give an idea of what had happened the market.

Thus we can answer the critical questions posed at the beginning of this paper. Armed with the index, which is an objective measure as a reference or comparison of investment returns that have been obtained, it will be success or failure of an investment strategy can be measured objectively.