dumb money
Inexperienced market participants
Dumb money is capital invested by inexperienced or uninformed investors, as opposed to institutional or professional traders.
The term implies these investors follow trends, buy high, sell low, and generally make poor timing decisions: When dumb money starts piling into a stock, smart money gets out.
Wall Street uses it dismissively, though the "smart money" doesn't always outperform.
- short squeezesRapid covering of bearish positions
- pump and dumpFraudulent stock inflation scheme
- panic sellingFear-driven mass liquidation
- recency biasOverweighting recent information
- crowd behaviorActions of assembled masses
herd mentality · GameStop · diamond hands · paper hands · bag holders · confirmation bias · retail investors · meme stocks · FOMO
- trading slangbull, short, long, dip, pump
- market sentimentbullish, bearish, bullishness, bearishness, optimism
dumb moneysmart money
Capital from informed sources
institutional investors · hedge funds · Wall Street · private equity · market makers
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