Should investors in equity markets be worried about the timing of Essay

Should investors in honor markets be worried about the timing of their investment - Essay ExampleThe modern thinking in Financial Management today is that monetary managers do not perform the role of goal keepers of financial data and information, and arranging funds, whenever directed to do so. Rather, financial managers occupy a key role in top management areas by solving complex management problems. Today, the financial managers are responsible for do the fortunes of the enterprise and are involved in the most vital management decision of allocation of capital. finance managers are responsible for the procurement of funds and effective utilization of funds to achieve the business objectives.finance manager is required to make decision on investment, financing and dividend keeping in view the objectives of the company. mend making investment, it is necessary to give stress for the snip cherish of money. It means that the worth of money certain today is polar from that it sh ould be received in prox. There are number of reasons related with the metre respect of money, such as-Investment Analysis generates equivalent current year values allowing comparisons between contrasting investments and identifies investment performance spikes or dips providing a tool to maximize overall return (Investment Analysis Software. 2007).In addition to this, time value of money is very important, because it helps in arriving the comparable value of the different nub arising at different points of time in to equivalent values of a particular point of time either in drive home or in future. The cash flows arising at different periods of time idler be do comparable by using any of the two ways- i.e. by compounding the present money to a future date, (for finding out the value of the present money.) or by discounting the future money to present date, (for finding out the present value of future money.) Under techniques of compounding, future value of a single cash flo w is-FV= PV (1+r) Where,FV= Future Value n historic periodPV= Present value of cash flow todayr = Rate of interest per yearn = lean of years for which the compounding is doneSimilarly, under discounting techniques, the present value of a single cash flow is-PV = FVn (1/1+r) Where,FVn = Future value n yearsr = Rate of interest per yearn = Number of years foe which the discounting is doneBoth investment and financing of funds are two of the essence(p) functions of finance manager. The investment of funds requires a number of decisions to be taken in a line in which funds are invested and benefits are expected over a long period. Funds procured from different sources have to be invested in various kinds of assets. Long term funds are used in a project for various fixed assets and overly for current assets. Investment of funds has to be made after careful assessment of the various projects through capital budgeting. Asset management policies are also laid down regarding various i tems of current assets. Investment in equity shares is a complex map this is because unlike debt and preference shares