Hey, Ross here:
With all this market turmoil, is the smart money on the retreat?
Today’s chart shows the answer.
Chart of the Day
This is the National Association of Active Investment Managers (NAAIM) Exposure Index.
It basically shows how exposed active fund managers are to U.S. equities. The higher the number, the more exposure they have to U.S. stocks.
As you can see, right now, this number has been steadily declining…
And it’s now back at levels last seen in May 2025.
So is the smart money in retreat?
The evidence points to yes. They have indeed been significantly scaling back their exposures.
But does that mean we, as retail traders, should also be in retreat?
Not quite.
And the reason why we don’t necessarily have to retreat alongside the smart money is because of incentives.
I explain what I mean below.
Insight of the Day
Most institutional investors are more risk averse than most think because of incentives.
Most institutional investors are surprisingly risk averse. And that’s because of the individual incentives of the fund managers.
If they don’t scale back as the market is – they could be fired for “going against the grain”.
But if they do pull back alongside the market…
Then they can always “hide” in the safety of the crowd.
It’s like the old saying “no one ever got fired for recommending IBM”.
Of course, this is generalizing.
There are absolutely smaller and more aggressive funds that are much more risk tolerant.
But as a whole, institutional investors are much more conservative than you would think.
As retail traders, we don’t need to be constrained by these incentives.
There’s no investment committee that will fire you.
So take advantage of it – and reallocate instead of retreat.
And here’s another constraint the institutional investors have…
They can never sit out of the market completely.
They always have to be invested somewhere – especially if their mandate is to only invest in stocks.
And that’s something we can always take advantage of.
That’s why in just a few hours at 11 a.m. Eastern later this morning…
I’m going LIVE to show you exactly how to exploit these smart money flows…
Using a strategy that could have had you book double-digit gains over the past week – all while the market was rolling over.
If you’re even the slightest bit worried about where this market is headed…
You owe it to yourself to show up to this free presentation.
Just click here to lock in your spot if you haven’t yet…
And I’ll see you in just a bit at 11 a.m. ET sharp.
P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.
iOS: https://apps.apple.com/us/app/goto/id1465614785
Android: https://play.google.com/store/search?q=goto&c=apps
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