FT considers how sanctions could affect the portfolios of the investors in three relatively predictable ways, and another three that are more complex due to their uncertain tipping points.
First, companies operating in areas covered directly by sanctions experience sudden, and mostly unanticipated, "exogenous" disruptions to supply chains and customer demand. Production costs increase while sales fall. If many of these companies find it difficult to quickly reorient their activities, the resulting hit to profits can prove hard to reverse, leading to lower share prices and wider credit spreads and borrowing costs.
The damage is more significant for those investing in companies with less diversified business platforms, and is particularly harmful for western investors in Russian companies, with patchy market liquidity accentuating the losses.
Second, national and global economic activities are negatively affected at a time when the underlying resilience of both Russia and the west is already stressed. While benefiting from relatively high energy prices, Russia has not progressed sufficiently in diversifying its economy.
For its part, western Europe is struggling to engineer a meaningful recovery after the deep recession occasioned by a debt crisis that almost demolished the eurozone. Citizens in both regions - be they consumers, producers or job seekers - will face additional headwinds on account of this new set of economic complications.
Third, the longer sanctions prevail, the greater the likelihood that the prior two "income" effects will contaminate a growing set of balance sheets. This is particularly relevant for European banks with relatively large exposures to Russian entities.
Fourth, a further escalation of geopolitical tensions could, at some stage, undermine investors' faith in the effectiveness of the central bank policy support that has empowered them to buy on market dips, making previous market corrections both temporary and reversible.
Such investor resilience is also essential for maintaining the artificially high asset prices through which central bankers are seeking to stimulate western economies. Should it be shaken - and the exact tipping point is hard to predict - markets and economies would suffer from the declining potency of monetary policy, both real and perceived.
Fifth, reputational and other strategic considerations can encourage portfolio repositioning among institutional and (especially) government investors that, at least initially, have little to do with underlying fundamentals. As an example, Norway's sovereign wealth fund has already indicated that it is reviewing its holdings of Russian assets given the political climate.