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. Bear Market

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

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

    The action of investors moving their capital away from riskier ...
  5. Capitulation

    When investors give up any previous gains in stock price by selling ...
  6. Panic Selling

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