Daily Money Tip: Russian market not one for long term

Russia has a great stock market if you are a trader - but not if you invest for the long term.

That's the upshot from the last few weeks, ever since Russian President Vladimir Putin concluded the 2014 Sochi Olympics, then promptly moved into Crimea to slap down Ukraine's revolutionary movement.

"So far, the economic and political costs for Russia as a result of its aggressive reactions to the revolution in Ukraine look to be significant," said Bill Witherell, chief global economist for Cumberland Advisors, with offices in Sarasota, Fla., and Vineland, N.J. "It is difficult to see a positive outcome on balance for Putin, whatever his planned end game may be. We intend to continue to exclude Russia from our international and global equity ETF portfolios."

So, no Russian ETFs, but Cumberland is buying energy ETFs in its client portfolios, since the volatility in Ukraine has boosted crude prices globally. Ukraine is Russia's largest consumer of natural gas, and Russia is the "swing producer" - a key supplier - of crude oil among OPEC nations.

We took a look at some Russia-related ETFs, and found that they have lost enough value this year to take them down to levels not seen since 2009, after the global financial crisis. As a trader, this means many of them are trading at multiyear lows and are ripe for a rebound.

Among these are Market Vectors Russia ETF (symbol: RSX), SPDR S&P Russia (RBL), SPDR S&P Emerging Europe (GUR), Market Vectors Russia Small-Cap (RSXJ), and iShares MSCI Russia Capped ETF (ERUS).

If you are a long-term investor, however, Russia likely will disappoint. Just ask ExxonMobil Corp. (XOM) or British Petroleum (BP), which had assets or drilling rights practically nationalized by the Russian government or Kremlin-backed oligarchs.

Some portfolio managers are instead shorting the German DAX index - or betting the German stock market will fall in price. Rareview Macro, a hedge fund in Stamford, Conn., argues that Germany is now surrounded on four sides by weaker currencies - the U.S. dollar, Japanese yen, Chinese yuan, and Russian ruble - and as a result "is now the shock absorber of these countries exporting deflation as their currencies weaken relative to the euro."

The German companies sell to these emerging countries. Volkswagen and BMW have employee wages paid in rubles, yuan, and other currencies, but they book sales in strengthening euros. Under the Rareview theory, Germany is exporting its goods and services at lower prices.