Stock Market Vs Bull Market Essay

One of the consequences of the Great Depression in 1929 was that people started to relate stock markets and economic growth in the following way – Bull markets mean economic growth and Bear markets means economic downturn, recession-overall a pale and gloomy environment. But does bullish or bearish market really govern the economy? It is true that growth in economy favors bullish markets but do bull markets really mean a booming and bustling economy? There can be many reasons bull markets can arise and granted some of them may mean better economic growth (like increase in net savings leading to more investment in stock market) but others might not be related to economic growth at all. For example bull markets may be a result of a shift in trading strategies by investors looking for higher growth assets (in other words filling their own pockets). Stock prices may also rise when more dollars are pumped into the market during periods of recession.
The point I am trying to make is that the stock market and economy is correlated but bullish market may not mean a growing economy. The reason for that is the stock market is governed by Investors confidence. If an investor has confidence in a stock he/she will buy it, if not he/she won’t. A case in point where investor confidence lead to bullish market but had nothing to do
Economies grow when people can subsist while still saving money. This saved money increases the Capital stock which means a bullish market. So, it can be affirmed that Bullish markets might not mean better economic growth but what they can be is a better indicator of the economic conditions that are prevailing in this country (provided the Central Government and State Governments and the RBI are working in tandem to keep inflation in check by regulating interest rates and maintaining the supply chain and keeping it