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The Market has many contexts. It typically refers to a local equity market index. In portfolio theory, it refers to the whole set of investable assets, like stocks, bonds, real estate, collectibles and even human capital.
When referring to global stocks investors may refer to 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
For context, it's important to remember the distinction between casual conversations about The Market and the more theoretical topic concerning the Market Portfolio. So clarification is important, as is certainty around the benchmark of focus.
Lia: My Dad says Wall Street creates
confusing terms like Market to confuse investors.
Doc: I can't disagree.
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Familiarity. The other two are valid drawbacks.
Equity, like a broad stock market index.
Still unclear on The Market? Check out the Excel financial modeling series Quant 101.
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