Sample Economics Paper on Market Indices

Sample Economics Paper on Market Indices

Taking into consideration the dynamics of any business, predicting the overall outcome of any investment remains uncertain for most companies. Many businesses face numerous obstacles in performing their duties and therefore controlling the market constitutes a larger portion of the long term objectives. My understanding of the indices making industry is that the established companies that have been in the industry for more than 50 years, enjoy monopoly of power and have substantial control in the decisions made by the stakeholders. The Dow Jones and company, for example, has expanded over time and is approximated to worth more than $300 trillion.

Notably, many businesses aim at increasing their wealth and making the profit, and these goals can be achieved by attracting more investors and growing their market control. From my view, Stock indices were devised as one of the measures that evaluate the performance of a company against other players trading in shares. I think that Indices makers such as the Dow Jones and Company insist on having negligible power in decision making than approximated by the investors. On the contrary I establish that, the actions of these companies prove otherwise as they can decide the firms to be listed and the applicable costs in making indices.

Although index makers powers control the decision making in most sectors of the industry,  I think that their authority in a world of fixed income is limited. The limitation is propelled by the availability of passive investments that is less prevalent in bonds than in equities. Additionally, the DSC quantitative group and state street developed other investible devices that have a higher return on a long term investment. In my view, these assets enable investors to mimic the performance of the US private equity and to make informed decisions. Moreover, the new types of indices that have been developed in the market, will therefore limit the amount of control of the indices making companies and enable investors to have a variety of options to invest their money.