Many investors think the economy is very bad, but the market is increasing. Many new investors thinking about why Sensex is rising in India, Why is Indian stock market going up when the economy is going down. Before buying a stock, didn’t we feel the market was increasing in one direction from the last year? If all the above things are true, then the market is increasing very strongly. It is possible that new investors are not able to evaluate the market, but what happens to the FII and DII. Are they also not able to see if the market is expensive?
Today, here I will tell you why the market is growing in one direction. And I will also tell you about a very fundamental indicator, which will give you the confidence to invest in the market. To understand this, we have to revisit 90 years back the American economy.
The great depression:-
You must have heard about the great depression. It started in August 1929 to March 1933. Many industries drowned, many people died of starvation. But let me tell you one shocking thing.
As soon as the depression period ended, the consumption of the people started growing rapidly.
As the consumption grew, the market recovered quickly. As people increased their consumption, the profits of all the businesses also increased. And investors always prefer to invest in profit-making companies. And due to this reason, everyone gets to see an increase in the stock market.
Indian stock market after Covid-19:-
Since last year, everyone has been keeping their eyes on the stock market. But none of them turned towards the CPI index. CPI index tells you about the consumption done. The data of this comes every month. This is done month and year on year. It is believed that the more it increases, the stronger the reputation of the country’s consumption.
Our country’s CPI has increased since last year, and it is increasing. If we look after it then we get to know. It is the reason behind the stock market boom. This is why the market is not coming down.