Energy covers everything from the oil majors to small alt-energy start-ups. This is a tricky sector. If you don’t pick and choose carefully, you could easily lose your shirt.

For example, I’m not touching the oil majors right now. Even as they grow their profits, their oil production and reserves are shrinking. Their offshore production and pipelines are under attack by militants in Nigeria. Their joint ventures are under government attack by Russia and other countries looking for a bigger piece of the pie. It’s become an unfriendly world for Big Oil. And they don’t seem to know what to do about it.

Energy has a few places where investors can do very well. But it certainly isn’t a haven. Then what is?  

• Retail? It’s the third-worst performing sector in the S&P 500 during the past three months. Low-cost retail should do relatively well. But it’s no haven. If it were, you wouldn’t have to try to figure out why Wal-Mart (WMT) is doing well and some mega-stores like Costco (COST) aren’t.

• Precious Commodities? A surprising laggard that has lost investors some money over the past three months. I talk about gold below so let’s turn our attention to non-precious commodities for a moment.

A combination of bad weather, accidents, and project delays are pushing prices to record highs. Will this last? Could they go even get higher? Not if the economic slowdowns in the U.S. and Europe leak into Asia.

• Oil services? I’ve recommended overseas integrated oil companies, publically listed state-controlled oil enterprises, rig contractors, oil tankers, and oil pipelines. Half these companies were up last week – and my oil tanker – Tsakos Energy Navigation (TNP) – did the best. It rose 3 percent last week.

But since the beginning of the year, it’s no contest. The rig companies are my best oil-related companies by far.

Source: Plunges and Crashes and Bankruptcies, Oh My