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Money controlled and invested by institutional investors and market insiders. Supposedly, smart money investments perform better than others, and, because of this, some investors follow the smart money by buying and selling the same securities as institutional investors. Many analysts, however, dispute the idea that smart money is any "smarter" than that of the average investor.
The funds controlled by investors who should have special knowledge of the right kinds of investments to make. Essentially, the term refers to funds controlled by insiders or to institutional money. The implication is that if the individual investor can figure out where the smart money is going, he or she can follow suit and make above-average profits. Many researchers believe that smart money is no more likely to earn above-average returns than funds invested by typical investors.