The impact of the Russia–Ukraine conflict on the behaviour of individual investors

This article examines how individual investors react to the proximity of military operations thereby focusing on the early stages of the 2022 Russian invasion of Ukraine. Using a proprietary dataset covering almost 4 million transactions of individual investors, the study investigates the equity exposures of retail investors, revealing that individual investors initially increased their holdings in the first week but largely reversed these positions in the following 2 weeks. Applying OLS regression models on 144 aggregated investor categories (i.e. age, gender, and experience), the paper concludes that investor reactions to war interact with these demographic factors and should not be assessed in isolation, given that individuals aged 18–59+ increased exposure more than older counterparties, and experienced investors increased their equity holdings more compared to moderately experienced ones. Investors aged 80 or older tended to reduce their exposure unless they were highly experienced, in which case they increased it. This insight contributes to ongoing debates on how individual investors behave under stress and how behavioural biases, heuristics, and experiential earning manifest differently across demographic segments.