Insights & Advice

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Big data: Where is the ‘smart’ money going?

Dalton — We financial advisors are supposed to be smarter than individual investors when it comes to placing cash in, and taking cash out of, investments. Envestnet tracked where 96,000 financial advisors moved into and out of for the first four months of 2019, after the crash of December 2018. As you can see above, a large amount of cash was moved into bonds after the crash. Retrospectively that probably would have been considered a cowardly and imprudent move since the stock market rallied. Be they lucky or prescient, those investments worked out well since interest rates have tanked.

Below, you see that, after the crash, there was a big move out of inverse funds (mutual funds that go up in price if the market goes down). That makes sense since the money in those funds had already been made.

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