Everyone is making money (for now) · Invest & Retire Community

Eric Seto

Jun 3 • General discussion

Everyone is making money (for now)

The stock market relies on a certain cycle

1. Smart money (insiders / hedge funds / VC) moves in first

2. Okay-Smart money (mutual funds / fundamental analysts) moves in next

3. Okay money (pattern / technical analysts ) moves in as well

4. Dumb money (unable to evaluate an investment, retail investors who relies on news) moves in last.

I am not a big fan of the naming "dumb" money because retail investors like me and you are not dumb. But simply we do not have access to certain information as quickly as those insiders.

We do not have micro second reaction speeds like the quant funds.

Everyone makes money most of the time until we run out of #4 Dumb money

Right now, we see that on social media - everyone is making money.

So who is left to buy?

Who is left to continuously bid this market higher?

Once we run out of dumb money, investors (1,2,3) will pull out and we start this game anew.

In other words, a correction is coming.

Cheers,

Eric

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Eric Seto

Chartered Professional Accountant (CPA)

Chartered Investment Manager (CIM)

Founder of 5MinInvesting.com

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Disclaimer: This communication is provided for educational and informational purposes only and does not constitute investment advice, a recommendation, or an offer to invest in any fund or strategy. No advisory relationship is formed by receipt of this content. Any references to strategies or markets are general in nature and do not reflect the performance of any client account or investment product.

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Everyone is making money (for now)