How to Buy Russian Bonds

Savvy investors know that the best way to safeguard your investment is to diversify. For some, this means diversifying all the way to overseas markets, putting some of your money into foreign stocks and bonds. One hot market over the years has been Russia, whose treasury bonds have been yielding positive returns since 2015. If you want to invest in Russian bonds, however, there are a few things you need to know.

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How to Buy Russian Bonds
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Researching Russian Stocks

Before you approach an investment firm, put some time into researching the types of investments that are best for your portfolio. If you feel comfortable doing so, track down an investment service in Russia that is willing to work with overseas investors. You'll be able to save money by working directly with an agency in the country. You also may be able to get better insights into the interest rates you can expect on various investment types.

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American Investors

Perhaps one of the simplest ways to invest in Russian bonds is to find a local investment firm that will help facilitate the transaction. This can be complicated, as some firms decline to participate in transactions with other countries, citing compliance risks. Russia has been seen as unpredictable over the years, leading some large financial institutions to stay away. You may find that you're required to purchase a minimum in order to participate.

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Choosing Your Investment

Although the Russian stock market may have improved in recent years, it still can be volatile. Experts predict technology will be a reliable top performer in the coming years, since that market is thriving in the country. Treasury bonds, also known as OFZs, are extremely popular with international investors thanks to their promising yields.

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Risks to Investing in Russia

Unfortunately, investing in a volatile market like Russia comes with risks. Perhaps the biggest risk is U.S.-imposed sanctions, which could threaten the stability of those investments. Even just the threat of sanctions could lead investors to sell their bonds, creating problems for others who have put their money into the Russian market. Since global relations can easily change from one decade to the next, this means investors will need to constantly watch the political situation to determine if and when they need to sell.

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Although investors could potentially make big money by investing in Russian bonds, it's also important to consider the risks. An investment firm that specializes in helping Americans invest internationally should be able to guide you on whether the move is the right one for you.

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