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Market definition

The term can be confusing to the beginner, and it's too important to ignore.

Beginner

Market is a broad term that can be used in many contexts. In portfolio theory, it refers to the whole set of investable assets, like stocks, bonds, real estate, collectibles and even human capital. It can be less broad, and refer to global stocks using the MSCI World or the S&P Global 1200. It is also used more narrowly to refer to a basket of stocks in a country, like the S&P 500, FTSE Index or Nikkei 225. Some people also use the term Market as a catch-all for index and benchmark; however the terms are subtly different.

Synonyms: The Market, Market Portfolio


Other Original Content

Quiz

Click box for answer.

Which is not a drawback of using the Dow Industrials Index as a measure for the Market? | Diversification or Familiarity or Price-weighting methodology

Familiarity. The other two are valid drawbacks.

In a Sentence

Lia:  My Dad says Wall Street creates confusing terms like Market  to confuse investors.
Doc:  I can't disagree.

Video

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Video Script

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Related Terms

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Keywords:
Market
The Market
Market Portfolio
efficient frontier
portfolio theory
investments
stocks
benchmark
passive investing
index fund