Market Basket


DEFINITION of 'Market Basket'

A subset of products or securities that is designed to mimic the performance of an overall market. Market baskets contain a fixed selection of items, which are used to track such things as inflation, prices or performance levels.

BREAKING DOWN 'Market Basket'

For investors, the market basket is the principal idea behind index funds. A sample of stocks, bonds or other securities are placed in a portfolio that is expected to represent all aspects of the market. This provides investors with a benchmark against which to compare their investment returns.

Another popular market basket relates to the Consumer Price Index (CPI), which tracks a variety of consumer goods. The CPI looks at the price levels of consumer products and provides an estimate for inflation.

  1. Inflation

    The rate at which the general level of prices for goods and services ...
  2. Hedonic Regression

    A method used to determine the value of a good or service by ...
  3. Wholesale Price Index - WPI

    An index that measures and tracks the changes in price of goods ...
  4. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  5. Index

    A statistical measure of change in an economy or a securities ...
  6. Standard & Poor's 500 Index - S&P ...

    An index of 500 stocks chosen for market size, liquidity and ...
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  1. How does the Bureau of Labor Statistics determine the Consumer Price Index (CPI)?

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