Smart money versus dumb money in the major market turns there is evidence that there is a dichotomy between what makes smart money (purchases and sales of managers and executives with the shares of their own companies “insiders”), and silly money (private money).  It has been proven in the major ceilings of the market the “smart money” usually shows clearly seller, while the “silly money” buys the role of the first. This is what is happening now. You have probably heard or read the terms “smart money”, with which you define institutional investors or professions managers, whose information and quality of analysis is consistently better than those of other investors, and whose probability of being successful in the market it is also higher.

But how does that smart money act?

1. Smart money buys when others are afraid. The stock lost almost half of its value in less than two months. To use a classic language, there was blood on the streets, and therefore, it was time to buy.
2. Smart money sells when others are greedy. My colleague Doug Horning is a perfect example of selling when others are greedy.
3. Smart money sees trends where others do not. Nobody wanted to talk about the actions of metals or minerals. Many of the recommended actions have doubled their price.
4. Smart money ignores the headlines. Beyond the traditional “buy with the rumor and sell with the news” tips, smart money ignores the nonsense of the media, and instead focuses on the factors that motivate those headlines.
5. Smart money is committed to the big trends, not the money market. buy large positions in the securities that will benefit from those trends, and keep them. They do not need technical analysis, trend lines, or mobile averages … And they do not get scared when prices fall for the first time.
6. Smart money does not count the money before doing it. These investors understand that there are no safe things and that nobody will rescue them from their analysis if it is wrong. They hold a realistic expectation. And if they have a losing position, they will learn from it and will not refuse to invest again.
7. Smart money ignores government social reports and depends on their own investigations.

With this description of smart money, the next question is what are you looking at now? To answer this question, smart money tries to understand the long-term scenario in front of them. They are not interested in what events next week or next month. Smart money looks at the likely trends in the coming years. Smart investors ask themselves how you are:

Will real inflation rise or fall in the coming years?

Will interest rates go up or down in the coming years?

Will the dollar strengthen or weaken in the coming years?

What are the best way to protect you from heavy debts and out-of-control public spending?

What are the assets that are most likely to make money in the next few years?