I heard from two different clients this week who asked the same question: Will investing in U.S. stocks pay off anytime soon? It's a question a lot of people are trying to sort out.

Japan's Nikkei 225 is down 80% from where it was 20 years ago. What if a similar scenario is unfolding in the U.S.? What if it's worse? Two years ago, the question would have been laughable. And although I don't assign a high probability to that outcome, we all need to plan for it.

What, in hindsight, would have been the best thing a Japan-based equity investor could have done 20 years ago? Invest in countries that aren't at risk of being dragged down because of, or in sympathy with, Japan.

Hence, for anyone who thinks the U.S. is facing the same fate, and maybe it is, it would be prudent to invest in countries unlikely to be confronting the same malaise. Clearly, just about every equity market in the world has suffered a large decline. But for many countries, the drop is cyclical, not a 20-year, or longer, structural problem.

The task is to find countries that could begin a new bull market regardless of what happens in the U.S. I would rule out Japan. Western and Eastern Europe may actually have bigger problems than the U.S. -- the coalition government in Latvia just went down over the weekend and Austrian bank exposure to Eastern Europe is 80% of that country's GDP. Those are only two examples of the trouble that may be coming.

It's crucial to own countries that are on different economic cycles than the U.S. because stock markets tend to follow economies. Commodity-based economies are a good place to look for this attribute. In the past three months, the S&P 500 of the U.S. is down 10%. Chile, which only sends 15% of its exports to the U.S., is up 7%. Brazil, which sells a lot of its resources in emerging Asia, has risen 14%. And Norway, whose prospects are obviously tied to whatever oil does, has climbed 4%. Any of those moves could turn out to be a sucker's rally. But if their declines were cyclical events, the timeline for a rebound (six to eight months from their respective peaks) is plausible.

A theme I have written about frequently is the building up and out of things like ports, highways and electrical grids in ascending countries such as China. The pace of the build-out will ebb and flow and obviously is subject to cyclicality. But both the Shanghai Composite and the Hang Seng Enterprises Index (commonly referred to as H shares) have advanced 20% and 10%, respectively, in the past three months. Australia stands to benefit from this China effect, as it sells a lot of resources in that country. Though the Australian equity market has been crushed,

Chinalco

, a Chinese aluminum company, is buying a large stake in

Rio Tinto

(RTP)

, and

Minmetals

announced a takeover of

Oz Minerals

. China is buying Australian companies.

If this line of thinking makes any sense, you will need to do more research than usual. Broad-based international funds are often heavy in Japan and Western Europe, which I think are places to avoid. This means investing in country funds and individual stocks.

These are not end times, but I do believe U.S.-based investors will have a better chance of getting "normal" equity market returns from other countries.

At the time of publication, Nusbaum had no positions in the holdings mentioned, though that could change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback;

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