The Impact of War on the Behavior of Individual Investors : The Russo-Ukrainian Conflict
Using a unique dataset containing 3,989,104 transactions of 338,337 individuals conducted between 1 January 2021 and 1 May 2022, this article is the first to explore whether a war, and specifically the Russo-Ukrainian conflict, induced individuals to change their equity positions. The article further examines whether individuals’ characteristics, like their age, experience level, and gender impact their trading behavior. This article shows that financial consumers bought for more than 7 million EUR in the week before the invasion and then sold almost the same amount during the invasion week and thereafter, indicating that a European war changes the level of risk aversion and confidence of financial consumers. Multivariate analyses show that investors being less experienced increased their investments and individuals being eighty years old or older decreased their equity positions more when they did not have any prior investment experience, but increased their equity positions after building up this experience. Financial literacy and experience thus negatively impacts investors’ level of risk averseness as they are capable to make more informed decisions
Year of publication: |
2022
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Authors: | Priem, Randy |
Publisher: |
[S.l.] : SSRN |
Saved in:
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