17 August 1998: Russia devalues and defaults
Russia devalued the ruble, defaulted on its domestic government debt and declared a moratorium on some foreign debt payments. Investors who had piled into high-yielding Russian bonds assuming a bailout found out otherwise. The shock rippled across global markets and helped topple the hedge fund Long-Term Capital Management a few weeks later. Russian stocks collapsed. High yields, it turned out, had been high for a reason.
The lesson: Unusually high yields are a warning about risk, not a free reward for patience.
What it meant for investors
$1,000 in RTS Index at the start of 2000 → $6,111 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the first year in our price data after the event. That is 6.1 times the money, and $1,485 more than a plain index fund made over the same years.
What RTS Index teaches: Market prices assume you can sell; sanctions and capital controls can make a quoted value meaningless, a risk no volatility measure captures.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2000 | $180 | $6,111 | $4,626 |
| 2003 | $360 | $3,056 | $7,727 |
| 2005 | $610 | $1,803 | $5,763 |
green = beat the S&P 500 · red = lost money
What if you bought RTS Index? Every starting year and the full story →
More RTS Index history
- 24 February 2022: Russia invades Ukraine and its markets crash
- 25 December 1991: Gorbachev resigns and the Soviet Union ends
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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