How the Average American Can Help Punish Putin
The live-streaming of Ukrainians' suffering as Russia wages an unprovoked war on the country has outraged much of the world. Governments are leveling devastating financial sanctions on President Vladimir Putin for his aggression, and many Americans are looking for ways to do their part.
Cash donations are pouring in for Ukrainian causes and there is a movement to boycott Russian vodka. But can Americans also use their personal investment portfolios to show their support for Ukrainians?
Selling stocks and bonds that have any kind of link to Russia seems like it could be an effective way to pile more hurt on Putin's economy, especially if a lot of people do it. But there are some practical considerations. For one, how far do you want to take it? Would your plan include tossing out funds that have even the smallest allocation to Russian stocks? Or divesting from companies that sell to Russian consumers? Should you eliminate your holdings in any countries that may potentially support Russia, such as China?
The answers can be complicated. Most of us will have relatively minimal exposure to Russia, and hurrying to divest may amount to little more than a tax bill rather than real geopolitical change. Even so, the idea that any of your money might benefit Russia may now feel repugnant, and some people might derive moral satisfaction from cleaning out their portfolios to avoid any degree of support — now or in the future — for Putin. If that's you, here's how to evaluate your investments for opportunities to take a stand.
First, consider retirement accounts, such as 401(k)s. Russia is considered an emerging market and as such, its stocks and bonds aren't included in most mutual funds and exchange-traded funds in retirement portfolios. Fund research firm Morningstar estimates the average investor's retirement portfolio has less than 1% in Russian stocks and bonds.