Russia is the largest country in the world by area and eleventh-largest by nominal Gross Domestic Product (GDP). It is the world's third largest producer of oil and natural gas after the US and Saudi Arabia. Europe is significantly dependent on Russia's oil and natural gas reserves. In simple words, it is no small power and its vast control on key natural resources makes it an extremely dominant nation.

Historically, how American citizens have invested in Russia has been largely through Exchange Traded Funds (ETF), Mutual funds and American Depositary Receipts (ADR). Recently, the  New York Stock Exchange (NYSE) put a trading halt in some of the key Russian ETFs and ADRs. Example ETFs that were halted were the iShares MSCI Russia ETF (ERUS), Franklin FTSE Russia ETF (FLRU) and Direxion Daily Russia Bull 2X Shares (RUSL). These major ETF companies have suspended creation of new shares until further notice but buying and selling of shares remains available on secondary market.

To get an idea on how these Russian ETFs have done in the recent weeks, here is a snapshot -

ERUS moved from trading at $43 at the start of the year to now roughly $8.

Source: Google Finance

Similarly, FLRU moved from $30 at the start of the year to now roughly $9.

Source: Google Finance

Investors should remember when they are buying a Russian ETF, they are essentially buying a basket of stocks, for example the number of holdings in ERUS currently are 26 (number does keep changing depending on the fund strategy). This is obviously a safer mechanism as you are diversified way more rather than holding individual stocks. Even then given the current geopolitical tensions, I don't expect a quick turnaround for the Russian stocks, hence the Russian ETF strategy which is diversified might still be risky.

The largest ETFs based on weight in Russian stocks are FLRU, ERUS, RSX and RSXJ but there are other ETFs with quite a significant exposure as well that are available to the US investors. Another large source of direct investment in to the Russian markets is through ADRs. ADR allows US investors to hold non-US stocks with the help of American banks or brokers. American banks or brokers issue these so called receipts that represent a company stock held by the bank in the home stock market of the foreign company. Some example ADRs being - CIAN, YNDX and MTL.

The Russian Sovereign bonds have similarly suffered as well with the S&P Global, Moody's and Fitch now moving these bonds into junk territory. Given the cut-off of Russia from the SWIFT market, distribution payments to bond holders in the US could be a potential challenge.

Personally, I have not directly invested in the Russian markets (stocks, heavy weighted ETFs) as I am not a big fan of investments in petroleum and fossil fuel products. I believe in the long run, most nations would strive towards sustainable green energy and hence these investments would not be great bets for my portfolio.

That being said, when it comes to international investments I do have some indirect exposure to Russia as majority of my investments are in diversified global international mutual funds and ETFs which are mix of emerging and other developed nations and Russia being one of those in the list. One of my other larger exposures in international markets is in the China region because of its substantial growth in technological and other economic sectors.

I urge investors to stay extra cautious with the Russian markets for the time being. Higher risk takers might see this as a potential risk taking opportunity but not sure I would personally have an appetite for it. A majority of large US companies doing business in Russia have either halted their businesses completely or on the verge of cutting ties with their stakes in Russian companies. Russia has taken similar drastic measures by blocking overseas institutions from selling out local securities on the Moscow Exchange.

If you are interested in diversifying your stock portfolio and having more international exposure, my recommendation would be investing in global international mutual funds and ETFs. They would give you a good balance of diversification and risk when it comes to investing your money.