Investment especially on capital markets is really fluctuated and unpredictable. Sometimes it just needs a short time and the value will change. For instance the IHSG stock value that move to rise and fall fantastically at 2-3 months lately. But for several people, this unpredictable condition makes it more interesting. Its condition is usually called such as an artistic value of capital markets. Even though many people get involve in stock exchange world but some of them are still confused how exactly calculating their investment returns because it is not familiar for them. The outstanding calculation for society is the calculation way for such a deposit.
There are many ways from theoretical calculations used for calculating investment returns. Several of those are nominal calculation, real calculation, arithmetic and also geometric calculation. We can pick one of those which can easily calculate our investment returns with the simple way. From those all calculation ways, the easiest and most common used way is real and nominal calculation.
The real investment return is kind of returns which are calculated from the interest that we receive minus the inflations. There are two kind of Inflations used. Those are current inflation and average inflation of 10-15 years earlier. For instance, if you have deposit funds that have value of interest approximately 7% gross or 5.6 % net and current inflation 6.5 at a last year. Therefore, your funds are to be -0.1 % each year from calculation 5.6 % – 6.5 % result. It is mean that the investment returns are minus. It is imperative to remember that this kind of calculation is used when interest of deposit funds is left without involved to the calculation.
You can imagine how investor is under bankrupt because almost all of them really depend on its interest whereas sometimes the interest result is minus. So, to answer the question above, how much the ideal investment return is absolutely plus result calculation. Thus et least we don’t have to loss anything.