Investor Psychology Under Geopolitical Conflict: Evidence from the 2026 Iran–Israel–USA War

Abstract This mixed-methods study examines how retail investors described and responded to market uncertainty during the opening weeks of the 2026 Iran–Israel–USA war. Online recruitment produced 83 responses; 53 participants completed semi-structured interviews and subsequently completed the questionnaire, giving a final analytic sample of N = 53. The study used a sequential, qualitatively driven mixed-methods design with reflexive thematic analysis. The quantitative phase used study-specific scores derived from contextually adapted GAD-7 and PHQ-9 items, together with the Financial Anxiety Scale (FAS) and the Loss Aversion and Panic Behaviour in Investing Scale (LAPBIS). Because the GAD-7 and PHQ-9 wording was modified and the adapted versions were not formally validated, these scores are interpreted only as within-sample indicators, not as clinical measures or prevalence estimates. Mean scores were 11.5 (SD = 3.2) for the adapted GAD-7 indicator, 10.2 (SD = 3.8) for the adapted PHQ-9 indicator, 37.6 (SD = 6.2) for FAS, and 26.8 (SD = 5.5) for LAPBIS. The strongest Pearson correlations were between the adapted GAD-7 and PHQ-9 indicators (r = .72) and between FAS and LAPBIS (r = .70). Exploratory ANOVAs indicated group differences across portfolio-size and age categories. The interviews generated six themes: financial threat, increased monitoring, emotional responses, emotionally influenced decision-making, spillover into daily life, and shifts in investor self-perception. Overall, financial anxiety and investment-related behavioural responses co-occurred within this selected sample, while responses varied substantially across participants. The cross-sectional, self-selected design does not establish that the war caused the observed psychological or behavioural responses. JEL Classification: D81; G01; G11; G41