WSJ – The market tumult of the last two years has taught us something about these so-called “sophisticated” investors we’re hearing so much about these days: if we didn’t know they were so smart, most of them could easily be mistaken for a bunch of dummies.
To be a sophisticated investor is not unlike becoming knighted. Loosely, a sophisticated investor is anyone – individual or institution – with a lot of cash who is anointed to play at Wall Street’s high-rollers table. Regulators call them “accredited.” Sophisticated or accredited investors know the rules and the game, maybe they have their own research arms or pay third parties to do their research. Maybe not. It’s an exclusive club that allows anyone with a net worth of $1 million or more to play, and one that puts a greater liability on the investor.
