Investing with Autocrats

Could the key reason that U.S. investors haven’t done well in Russia be hiding in plain sight? [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=34924&elqTrackId=15c03dd09fc741178e4ec8c77343c4ba&elq=25785cf69b4242859caf5fed7d2e6384&elqaid=34924&elqat=1&elqCampaignId=16265) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] The devastation of Russia’s invasion of Ukraine grows by the day. It’s hard not to be gripped by the sight of cities in rubble, including residential neighborhoods, or by the spectacle of millions of Ukrainians fleeing their homeland. I’ve been moved by the spirt of the Ukrainian people as I find myself seeking [signs of hope in this tragedy](. My colleague Tom Lauricella recently took a closer look at how autocratic regimes like Russia affect the investing climate in that market. Reading through [Tom’s piece]( I was struck by the “Occam’s Razor” nature of his argument, meaning that the most obvious explanation is often the correct one. Could the main reason that U.S. investors haven’t done especially in places like Russia owe to the fact that these countries offer investors few protections and don’t consistently adhere the rule of law? I’ve also appreciated our team’s ongoing look at the perils of investing in emerging markets like Russia’s. Dan Sotiroff offered [a helpful overview]( of some of the key risk factors in emerging markets investing. He concluded that an investor’s best protection is diversifying, though an index fund or ETF isn’t inherently the best way to go about it. More specific to the Ukraine crisis, [Katherine Lynch recently pointed out]( that few emerging markets equity funds avoided exposure to the Russian market altogether, but those that did avoid Russia have dramatically outperformed the ones that invested there. Morningstar’s resident exchange-traded fund guru noted that some index providers and asset managers are [writing off Russia altogether](. The geopolitical turmoil has affected investors everywhere, though—not just those with direct Russia or emerging markets exposure. That’s why I appreciated [Amy Arnott’s commonsense piece]( about how to check up on a 401(k) plan in the midst of this volatile environment. Finally, I’ve been thinking about how many of the “financial” questions that people ask me are about something bigger than money. Focusing disproportionately on the financial aspects of where to live or work, or whether and when to retire, could actually cloud the right course of action. My column this week was called “[Step Away from the Spreadsheet]( because sometimes you ought to do just that. With warm regards, Christine Benz [Big Financial Questions? Step Away From the Spreadsheet]( Not all decisions are number-driven. The right answer might involve a bit of introspection. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [Required Minimum Distribution Confusion in 2022]( Ed Slott shares what changes have arrived. [Read More]( [20 IRA Mistakes to Avoid]( From contributions to conversions to distributions, don't fall into these traps. [Read More]( [Andrew Miller: 'No Index Is Truly Passive']( The investment advisor discusses portfolio construction, the ‘active decisions of indexes,’ and the challenges of setting in-retirement withdrawal rates. [Read More]( [How Can I Earn More on My Safe Money?]( Liquidity and principal loss are things to keep in mind. [Read More]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2022 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602