Core Capital vs. Marginal Capital

Most market participants treat all capital as if it behaves the same.

It doesn’t.

Core capital—pensions, sovereign wealth funds, strategic institutional holders, and passive ownership—creates long-duration force within markets.

Marginal capital—hedge funds, tactical allocators, leveraged traders, and short-term positioning—creates much of the day-to-day price movement investors observe.

IC-VMSI is built on a simple premise:

Markets are governed by core capital but priced by marginal capital.

Understanding the difference may be one of the most important advantages an investor can have.