Moneyzine
Contents
/Investment Guides /Kennedy Slide of 1962 (Flash Crash of 1962)

Kennedy Slide of 1962 (Flash Crash of 1962)

Moneyzine Editor
Author: 
Moneyzine Editor
1 mins
January 23rd, 2024
Advertiser Disclosure
Kennedy Slide of 1962 (Flash Crash of 1962)

Definition

The term Kennedy Slide of 1962 is used to describe the decline in the stock market that occurred between December 1961 and June 1962. Although the exact cause of the Kennedy Slide of 1962 was never isolated, it was thought to be a result of a swift change in investor sentiment.

Explanation

Also known as the Flash Crash of 1962, the Kennedy Slide of 1962 is named after then President John F. Kennedy. From 1953 through 1960, the United States experienced sluggish growth in terms of a 2.5% annual increase in Gross Domestic Product (GDP). To boost the economy, federal spending increased 20.4% between 1958 and 1961, driving GDP up by 19.6% in that same timeframe. This same pattern of growth was seen in the stock market, as the Dow Jones Industrial Average (DJIA) rose 19.51% from January 1960 through December 1961.

The Kennedy Slide would start in December 1961 and the decline would continue through June 1962, resulting in a 27% drop in the stock market's value (as measured by the DJIA), while the S&P 500 Index would fall by nearly 23%. The crash is attributed to a number of factors, including inflated stock prices and failing investor confidence in the market. The Kennedy Slide of 1962 was relatively short lived, with the market indexes hitting new highs just fourteen months after bottoming out.

Related Terms

Gray Swan Event (Investing)
The term gray swan event refers to an incident of sizable impact, which can be anticipated, but has a relatively low probability of occurring. Often recognized in hindsight, individuals assume the risk of a gray swan event when they invest in financial markets.
Moneyzine Editor
Moneyzine Editor
January 19th, 2024
Black Monday (Investing)
The term Black Monday refers to October 19, 1987, when the stock market would lose 22% of its value in a single day as measured by the Dow Jones Industrial Average. Black Monday is considered to be one of the most infamous trading days in the history of investing.
Moneyzine Editor
Moneyzine Editor
January 8th, 2024
Circuit Breaker (Investing)
The term circuit breaker refers to the policies and procedures that halt or stop trading when securities fall by a given percentage over a specified period of time. Circuit breakers were put into place by the Securities and Exchange Commission following the Stock Market Crash of 1987.
Moneyzine Editor
Moneyzine Editor
January 11th, 2024
Black Thursday
The term Black Thursday refers to October 24, 1929, which marked the beginning of the Stock Market Crash of 1929. On Black Monday, the Dow Jones Industrial Average would fall 33 points, which was approximately 9% of its value.
Moneyzine Editor
Moneyzine Editor
January 8th, 2024
Black Tuesday
The term Black Tuesday refers to October 29, 1929, which marked the end of the Roaring 20s, and the starting point of the Great Depression. On Black Tuesday, the Dow Jones Industrial Average would fall 30 points, which was around 12% of its value.
Moneyzine Editor
Moneyzine Editor
January 8th, 2024

Contributors

Moneyzine 2024. All Rights Reserved.