DEFINITION of 'Shakeout'

A situation in which many investors exit their positions, often at a loss, because of uncertainty or recent bad news circulating around a particular security or industry.


During the dotcom boom and bust, numerous shakeouts occurred. During these shakeouts many investors experienced tremendous losses.

  1. Correction

    A reverse movement, usually negative, of at least 10% in a stock, ...
  2. Panic Selling

    Wide-scale selling of an investment, causing a sharp decline ...
  3. Capitulation

    When investors give up any previous gains in stock price by selling ...
  4. Falling Knife

    A slang phrase for a security or industry in which the current ...
  5. Flight To Quality

    The action of investors moving their capital away from riskier ...
  6. Bear Market

    A market condition in which the prices of securities are falling, ...
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