The market portfolio is a portfolio consisting of a weighted sum of every asset in the market, with weights in the proportions that they exist in the market.
The concept of a market portfolio plays an important role in many financial theories and models, including the Capital Asset Pricing Model where it is the only fund in which investors need to invest, to be supplemented only by a risk-free asset (depending upon each investor’s attitude towards risk).
Q: What is a good approximation of world assets as defined by market capitalization? Please leave a comment, as I would like to hear your thoughts on estimates. Obviously some assets cannot be estimated/invested in (such as human capital). I have my own estimates, but wanted to gather other opinions first.
US Bonds $?T
Int. Bonds $?T
Int. Stocks $?T
US Stocks $?T
US Real Estate $?T
Foreign Real Estate $?T