As investors focus on the European debt crisis, Paul Hechmer, portfolio manager for the del Rey Monarch Fund, is stepping up his investments in several defensive Japanese stocks as an alternative, holding stocks like Shiseido and Seven & I Holdings Co., owners of the 7-Eleven convenience store chain.

The $6 million fund, which was launched in June 2001, has lost 3% over the past month, better than 99% of its peers in Morningstar's foreign large-cap stock category.

"Any time you have a troubled market it's good to find companies with real strong balance sheets, real strong cash flows," Hechmer said. Aside from their impressive financials, Hechmer also likes the fact that both companies market to a mass audience with Shiseido being a luxury brand in the United States, but a household name in Japan.

And while he is overweight Japan as compared to Europe, Hechmer hasn't given up on the Eurozone entirely. For example, he sees a great deal of value in Germany industrial Siemens ( SI), which he says has been oversold as a result of Europe's debt troubles and will benefit from a weaker Euro.

"Europe's way down and you can find some very good values over there. If you are worried about the currency then go buy a company that gets its currency outside of Europe," Hechmer said.

For those still worried about a global currency crisis, Hechmer suggests buying Barrick Gold ( ABX). And while some believe the price of gold is in bubble territory, Hechmer says the mining companies have lagged the yellow metal's rise and have room to grow.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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