This column was originally published on RealMoney on Feb. 16 at 8:15 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

RealMoney readers often ask me how to reduce exposure or correlation to the U.S. stock market, citing a litany of concerns: America's ever-growing need for foreign capital to fund its deficit; the threat of a weaker dollar; worries over higher energy prices. So it makes sense to explore ways to reduce reliance on the U.S. economy and capital markets.

Here are some ideas for a "Bomb Shelter Portfolio." Some of the concepts are rather extreme; I wouldn't recommend that anyone buy all of the investments listed below. However, a few of them could be the right way for you to create some diversification.

Most Canadian and Australian banks have a low correlation to the S&P 500. Both economies are driven by the supply and demand cycle for commodities.

Canadian Imperial Bank of Commerce ( BCM) and Australia's Westpac Banking Corp. ( WBK) have long track records of zigging when the U.S. zags. Additionally, both have high yields -- 3.4% and 4.3%, respectively.

If I had to choose only one, I would pick an Australian bank over their Canadian cousins because of Canada's proximity to the U.S.

While the U.S. imports much of its resources, you've probably heard that the U.S. is the Saudi Arabia of coal. While true change in the dynamics of our oil consumption is hard to visualize, it's possible that through technological innovation we could end up using more coal for home heating and powering vehicles. Consol Energy ( CNX) and Peabody Energy ( BTU) are two good proxies for the coal industry.

Is there anything more bomb shelter-like than uranium? This has been a small investing fad the last couple of years. Canada and Australia have the largest known uranium reserves: 12% and 30% of world totals, respectively.

Banking Abroad
Canadian Imperial Bank of Commerce (BCM) and Australia's Westpac Banking Corp. (WBK) have a low correlation to the S&P 500
Source: BigCharts.com

The purest play on uranium is Canada's Cameco Corp. ( CCJ). Rio Tinto ( RTP) and BHP Billiton ( BHP) also offer exposure, but this is a small business for these large, diversified miners.

A couple of more esoteric uranium plays are Australia-based Paladin Resources, which trades on the Australian Stock Exchange under the ticker symbol PDN, and Canada's UEX Corp., which trades in Toronto under the ticker UEX. Both are available, albeit at a high cost, through Schwab's global trading desk.

Many of the world's commodities are traded in dollars. Every so often, noise will be made about a transition from the dollar to the euro for commodity pricing. Even if this never happens, we may see countries, such as China, reduce their current dollar holdings. Syria announced Tuesday that it has switched the primary hard currency it uses for foreign goods and services from the dollar to the euro in a bid to make it less vulnerable to pressure from the U.S. The Euro Currency Trust ( FXE) is a way to play this trend.

Gold is another sky-is-falling favorite. There are two ETFs -- streetTRACKS Gold Trust ( GLD) and iShares Comex Gold Trust ( IAU) -- along with countless mining stocks.

Some countries have bomb-shelter qualities. I have written recently about Switzerland. South Africa has a lot of gold, and even a little uranium. The correlation of the benchmark JSE All Share Index to the S&P 500 is quite low.

In the event of another terrorist attack in the U.S. or expanded military commitments abroad, U.S. stocks could tank, but defense issues won't. Issues to consider are Lockheed Martin ( LMT) and Alliant Techsystems ( ATK), the ETF PowerShares Aerospace and Defense ( PPA), and optionable indices like the Philadelphia Defense Index (DFX).

South African Stocks
The Johannesburg Stock Exchange has outperformed the S&P
over the past few years.
Source: BigCharts.com

Perhaps the easiest defensive tactic is to buy an inverse index fund. ProFunds and Rydex have the largest selection of inverse products. These funds sell short the S&P 500, Nasdaq 100 and the Russell 2000, among other indices. Some also use leverage to capture up to double the inverse of the underlying index.

P.S. from TheStreet.com Editor-in-Chief, Dave Morrow:
It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our free trial offer to TheStreet.com's RealMoney premium Web site, where you'll get in-depth commentary and money-making strategies from over 50 Wall Street pros, including Jim Cramer. Take my advice -- try it now.

At the time of publication, Nusbaum was long streetTRACKS Gold Trust in client accounts, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, Ariz., 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; click here to send him an email.

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