Smart Money

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. Cash Investment

    1. Short-term obligations, usually fewer than 90 days, that provide ...
  6. Empirical Probability

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

    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. ETFs & Mutual Funds

    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. 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.
  4. 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.
  5. 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.
  6. ETFs & Mutual Funds

    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.
  7. Markets

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

    Here’s why the smart fund houses are top targets for acquisition.
  8. Investing

    Strategic/Smart Beta: What Investors Should Know

    Here’s what your clients need to know about smart beta funds and how they can impact their portfolios.
  9. ETFs & Mutual Funds

    Why Smart Beta Is Not Popular in Asia (BLK)

    Find out the primary reasons for Asian investors lagging behind U.S. investors in the amount of investment capital committed to smart beta ETFs.
  10. ETFs & Mutual Funds

    The True Costs of a Smart Beta ETF (IVV, USMV)

    Consider smart beta ETFs, which can provide superior risk-adjusted returns, but also carry numerous costs and potential pitfalls.
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 >>
  6. Why should I dig further if I find a company has positive cash flow from investing ...

    Understand why it's important to dig into a company's sources and uses of cash if it has a positive cash flow from investing ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center