A doctor gave a man six months to live. The man couldn’t pay his bill, so he gave him another six months.

The man with the terminal condition in Henny Youngman’s joke reminds me of the US market. The bull market keeps getting a death sentence, the signs point to imminent doom, but the bull keeps lengthening its run by another six months. Indeed, part of this life extension may have to do with the US – its citizens and its government – racking up massive debt and being unable to pay their bills!

Nonetheless, I must say it: this bull market, in my opinion, has less than six months to live.

I try to avoid relentless doom and gloom; in fact, I wrote back in June 2003 that the young rally had legs. While I have been increasingly concerned about the bull and its underpinnings over the past year, I have eschewed bearish predictions because of the tremendous upward pressure caused by the liquidity in the system.

I have recently read long rationales for the bull case, and some arguments are compelling. But my belief that a bear market and a recession are coming soon arises from the inexorable forces that now appear to be at hand.

Rising interest rates, which began in June 2004, will continue for a while and start to pinch. While stocks on average have rallied in the 12 months after the first boost, multiple rate rises have led to market declines and often recessions. Emergency level rate cuts, along with big tax cuts, helped revive this bull and the end of both stimuli will help kill it.

Another death knell: the American consumer is overextended and, short of selling his soul, has few new avenues open to increase his spending ability. The average US family spends $1.22 for every dollar it earns, has 13 credit cards and $9,312 in credit card debt – twice as much as 10 years ago, according to CardWeb.

Americans have taken $1,600bn out of their homes through equity loans since 2001, according to Goldman Sachs. The “housing ATM” that has kept many Americans living beyond their means is just about tapped out. With all this easy credit, it is no wonder consumers have avoided a recession for 14 years.

It is worth noting that, until the past 12 months, oil has been cheap for much of that 14-year run. Now, crude stands in the mid-$60s; I believe the days of $50-plus oil are here to stay for a long, long time.

The last hard truth: the housing market is finally cooling, and this will have a big chilling effect on the economy and the market. Real estate has accounted for 70 per cent of the rise in household net worth since 2001, according to Merrill Lynch’s David Rosenberg, whose impressive research indicated that 60 per cent of America is in a bubble.

The “soft” observations worry me even more. A seemingly well-heeled couple I know recently revealed they were selling their home because they were drowning in debt. What’s more, their revelation led to several friends confiding that they were teetering as well, and their real estate agent said the forced sellers constitute a rapidly growing market. I am worried that all this may point to the painful post-bubble recession many, including Fed chairman Alan Greenspan, believed we had avoided.

In this scenario, what is an investor to do? This is tricky, because there is no single market in the world that doesn’t experience a fall-off effect from the US. I even worry about some of my favourite emerging markets, which look likely to suffer from higher interest rates in the US and would certainly get knocked around by a bear market here in the States.

But there are some types of investments that may hold up better than others in this nightmare scenario. While the countries that let me sleep better in this environment span the globe, they share some traits, including valuations well below the US market’s and increasingly vibrant domestic economies less vulnerable to the US.

My guess is this expatriate portfolio of foreign countries will hold up if the US stumbles. And, thankfully, they look poised to do quite well if America does not collapse.

Turkey’s market has faced plenty of volatility over the past 10 years but it appears to be well on course to stability and growth. In spite of the bumpy road, it is likely to join the European Union by the end of the decade, interest rates are falling, growth in gross domestic product has been a robust 6-7 per cent and a thriving middle class is emerging. Meanwhile, Turkey’s two biggest trading partners are Germany and Russia, so it carries less exposure to both the US and China. The stocks have had a tremendous rally over the past two years but at a P/E of about 13 they are still reasonable.

The best bet for investment in Turkey is the Turkish Investment Fund, a closed-end fund that trades under the symbol TKF.

The Seoul market may be the best bargain in the world right now. The benchmark index trades with a P/E multiple under 10, while interest rates are benign and corporate growth has been strong. The country’s leading companies, such as chipmaker Samsung and steelmaker Posco, compare favourably with their global peers, yet they trade at valuations half the size of their competition.

Investors have two fine choices when it comes to Korea: they can buy the passively traded exchange-traded fund iShares Korea (ticker symbol: EWY) or the stellar Matthews Korea fund.

Like Korea, Turkey and many other emerging markets, Brazil has had a winning streak over the past two years. But the stock market sports a P/E of about 11 while earnings growth has been above 30 per cent. While the US is Brazil’s largest trading partner, it is increasingly trading with Argentina and China, its next largest partners.

The best way to invest in Brazil is the ETF, iShares MSCI Brazil (EWZ), which is heavily weighted toward materials and energy companies.

In addition to these countries, investors should also consider three others recently highlighted in this column: India, Japan and Canada, with the suggestions being the India fund, Matthews Japan and iShares Canada, respectively. If you are worried about US returns, I would recommend buying a basket of these six countries and have it make up about one-third of your portfolio that usually gets allotted to US stocks.