What is 'Smart Money'

Smart money is cash invested or wagered by those considered to be experienced, well-informed, "in-the-know" or all three. Although there is little empirical evidence to support the notion that smart-money investments perform any better than non-smart-money investments do, many speculation methods take such influxes of cash very seriously.

BREAKING DOWN 'Smart Money'

Because insiders and better-informed speculators typically invest more, smart money can sometimes be spotted by greater than usual volume, especially when little or no public data exists to justify it. Knowing who the smart money is and when and where they're investing can be of great benefit to retail investors who want to ride the smart money's coattails.

RELATED TERMS
  1. Smart Beta

    Smart beta defines a set of investment strategies that emphasize ...
  2. Smart Beta ETF

    Smart Beta ETF is a type of exchange-traded fund that uses alternative ...
  3. Smart Market

    A type of auction in which transactions are made to and from ...
  4. Investing

    The act of committing money or capital to an endeavor with the ...
  5. Notional Value

    The total value of a leveraged position's assets. This term is ...
  6. Empirical Probability

    A form of probability that is based on some event occurring, ...
Related Articles
  1. Investing

    Top 5 Smart Beta FAQs

    In the first half of 2015 we’ve seen many of our smart beta predictions fulfilled. So, here are a handful of common questions and answers investors have.
  2. Investing

    Smart Beta ETF Myths and Misconceptions

    Discover smart beta exchange-traded funds (ETFs), and learn about some of the common misconceptions and characteristics of this type of product.
  3. Investing

    Smart Beta ETFs: An Overview

    What are Smart Beta ETFs?
  4. Financial Advisor

    How to Explain Smart Beta Strategies to Clients

    Smart beta funds continue to gain steam. Here's how to explain the benefits of these strategies to clients.
  5. Investing

    3 Reasons Against a Smart Beta Allocation in Your Portfolio

    Find out why smart beta strategies might not be the best bet, and discover 3 reasons why you should think twice before using them to allocate stocks.
  6. Financial Advisor

    Smart Beta ETFs: Understanding the Risks

    Smart Beta ETFs have grown in popularity in recent years. These are the risks that advisors and their clients need to understand.
  7. Financial Advisor

    Smart Beta ETFs and Market Timing: The Lowdown

    Smart beta ETFs are all the rage, but before investing in them, investors and their advisors should know what is behind each strategy.
  8. Investing

    Is Smart Beta a Boom That Will Bust? (BLK, LM)

    Find out what is behind the popularity of smart beta funds and who they benefit more, the investors or the investment companies.
  9. Insights

    Why 'Smart Beta' Fund Houses are Getting Acquired Like Hot Cakes

    Here’s why the smart fund houses are top targets for acquisition.
  10. Financial Advisor

    Smart Beta: Set Up for a Fall?

    A large number of investors have climbed onto the smart beta bandwagon but some believe these strategies are set up for a fall. Here's why.
RELATED FAQS
  1. How do I use smart beta funds to create a diversified portfolio?

    Learn how smart beta funds may give greater diversification than passively tracking stock indexes and make active management ... Read Answer >>
  2. What is the difference between a smart beta fund and an index fund?

    Learn about the differences between smart beta funds and index funds and how market capitalization is used to construct index ... Read Answer >>
  3. How can smart beta be used in trading bonds?

    Learn how smart beta strategies are being used to construct alternative groups of corporate fixed-income securities versus ... Read Answer >>
  4. Is smart beta cheaper than hedge funds?

    Discover how to estimate and compare the added expenses for smart beta strategies and hedge funds to see if they are the ... Read Answer >>
  5. Are short-term investments a good strategy for cash-rich small businesses"?

    Learn more about investment choices available to small businesses and whether short-term investing is a smart choice for ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center