What Is Smart Money?

By Jeremy Bowman – Updated Jun 10, 2025 at 1:05 PM

Key Points

Smart money refers to professional investors like hedge fund managers and institutional investors.
Investors can track smart money through quarterly 13-F filings, though not in real time.
Most hedge funds underperform the S&P 500, making S&P 500 ETFs a more reliable investment.

Investing is full of jargon, and one of the more popular phrases you're likely to hear is "smart money," which is used in contrast to "dumb money."

You might guess that smart money refers to those holding more money, and you'd be right, but there's more to it than that.

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An investor views charts and data on four monitors in an office. — Image source: Getty Images.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.