As the world watches Russian troops attack Ukraine, global leaders impose sanctions on Russia, as opposed to sending military personnel to assist the Ukrainian people with repelling Russian forces. Over the long term, these sanctions may impose more damage on Russia and the companies that lay within its borders than troops perhaps could. It is unknown, though, at this time, what the total economic toll of these sanctions will be on Russia and its economy; however, most analysts feel it will be substantial.
But what may be more destructive long-term for Russia is not what is happening to the country today but what may not happen to Russia in the future, new development and investing. The Russian stock market shut down shortly after Russian troops entered Ukraine. But not only did Russian stocks stop trading in Russia, but also in the US and other markets worldwide. Furthermore, countless foreign businesses that had operations in Russia have pulled out and no longer operate their stores, shops, and factories in the country.
So, both the individual business investments have walked away from Russia, and the world financial markets have essentially cut Russia off from capital. This lack of capital both from the smaller individual standpoint and the larger global point of view, could put Russia in a tight spot in years to come as the country and its businesses may struggle to grow and re-invest in themselves without the support of foreign investment. Continue reading "Situation With Russian ETFs Highlights A Bid Risk"