What is smart money

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Smart money refers to investments or transactions made by “expert” investors who have a comprehensive understanding of financial markets; they can identify or foresee trends before others.
Investors who do not spot or predict investment trends, i.e., those who try to ride the movement after the smart money has already made most of its profit, are called “stupid money” or “dumb money.”

Many people believe the whole thing is a myth. They say that wealth managers people who manage and advise on clients’ portfolios perform no better (in a surprising number of cases worse) than the overall stock market’s average trend over any given period.
“Sophisticated investors who tend to pick the right moment to buy or sell assets because they can identify trends and opportunities before others do.”

Smart money can also mean the collective force of big money that can move markets. When it has this meaning, the primary force behind smart money is the central bank.

The smart money in venture capital

In the venture capital world, the smart money is an investment term that includes money people invest in a business and the time, advice, and know-how they put into the company. It is called “smart because the business receives the investors” wisdom as well as funds.
In venture capital terminology, when just money is invested without the investors putting in any of their know-how or time, it is called “dumb money.”

The smart money in gambling

In the betting world, smart money refers to gamblers who know what they are doing and earn a living on their bets. Many use historical mathematical algorithms to decide where to place their wager and how much to bet.

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