The market is inherently volume-weighted, and there is much more "smart money" than "dumb money".

To give an example of something a smart investor would do, Warren Buffett supposedly only invests in industries he understands in depth:

http://www.investopedia.com/articles/05/012705.asp

What proportion of investors would you suggest show such restraint? Over half?

The proportion of "investors"? Low. The proportion of market capital allocation, among people doing active allocation for long-term buy and hold strategies? Very high.