Perhaps you already have an account with a Russian broker and invest in securities of Russian companies. Perhaps you are just thinking about working with the stock market.
I would like to share my opinion on why an investor who thinks long-term should start working with the US market as soon as possible.
The nominal value of shares in US dollars, as well as dividend payments. Yes, at the moment, the Russian market provides a higher return (for example, in 2019, the RTS index grew by 44.9%, while American stock indices showed growth of 22-35%). But over the long term, the devaluation of the ruble and Russian inflation eat up all short-term benefits.
Insurance of assets in brokerage accounts. Since 2004, the Deposit Insurance Agency has been operating in Russia, which insures your money in a bank deposit for up to 1.4 million rubles (the amount is indicated at the time of writing and may change in the future). Unfortunately, your funds in a brokerage account (both securities and cash) are not protected in any way. If the broker turns out to be a fraudster and, for example, decides to pull off a tricky scheme with your shares (like the broker Utrade), then you are unlikely to be able to get your assets back. In the US, there is an association called SIPC (Securities Investor Protection Corporation), which insures the accounts of clients of brokers who are members of this association. Securities in the amount of $250 thousand are insured, as well as cash in the amount of $250 thousand. Derivatives (futures, options, etc.) are not insured.
Respect for the interests of minority shareholders. On the Russian stock market, you can count on your fingers the companies that pursue a policy aimed at protecting the interests of minority shareholders. Off the top of my head, I can only name Lukoil, which regularly buys back its shares, pays good dividends and, in general, actively works to increase its capitalization. Most Russian companies are not interested in capitalization growth and act strictly in the interests of the majority shareholders. In the US, the capitalization growth paradigm is one of the most important for public companies.
Diversification of your assets. No one knows what might happen in Russia in 5 or 10 years. During the 1918 revolution, those who had cash and assets abroad managed to survive. Of course, I do not expect a similar scenario in modern Russia, but I sleep much better knowing that my capital is stored overseas, among other things.
Access to a much larger number of issuers. The list of blue chips in Russia includes 3 dozen companies. There are a couple of dozen more interesting issuers from the second tier. That’s all – there is simply nowhere to invest. Especially if you do not want to get involved with the oil and gas sector. There are no public IT companies on the Moscow Exchange at all (Yandex is an advertising sector).