Smart Money

DEFINITION of 'Smart Money'

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.

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