Market Portfolio

See: Portfolio.

When you invest, you're supposed to diversify. Ideally, you would hold some position in every conceivable market: stocks, bonds, precious metals, other commodities...all of it in various currencies and for various maturities. It's hard to do in real life. But if that ideal were obtained, it would represent a market portfolio.

The term refers to a set of investments that tracks the entire financial market. Not just a subset, but the entire scope of offerings available. Complete diversification.

Not only does a market portfolio have a toe in every puddle...the various market segments are proportional to their overall presence in the market as a whole. If equities make up 45% of the financial market, your market portfolio is 45% invested in equities.