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Workers tend to a well head at an Encana fracking gas well outside Rifle, in western Colorado March 29, 2013.Brennan Linsley/The Canadian Press

In Canada's energy sector, the fuel tank's on empty. Or worse.

The S&P/TSX capped energy index was sitting on a cumulative five-year loss of close to 20 per cent as of the end of November. After a big slide in the price of crude oil, the index was down over the three-year, one-year, year-to-date, one-month and one-week time periods as well. Energy's volatile and there will be wins and losses for investors. But losses have dominated in recent years, and that means investors have to strategize about their energy exposure.

Get out of energy? Nah – for better or for worse, it's the second most influential sector in the Canadian stock market after financials with a weighting of about 21 per cent. And we know oil prices are going to hit bottom and rebound at some point, just as they stopped rising and turned lower in fall 2014. Another approach is to dilute the impact of energy in your portfolio with some global diversification.

In the S&P 500, energy accounts for about 9 per cent; in the MSCI EAFE index, energy sits at about 5.5 per cent; in the MSCI emerging markets index, energy's at 8.8 per cent. If you have any room at all to add global content portfolio while staying within the bounds of prudent diversification, then now's a time to give it some serious thought.

What's the mix? Consider how they do things at the Mawer Balanced Fund, one of the country's better options for investors who appreciate consistent returns, low costs and steady, no-drama management. Bonds are at 31 per cent, Canadian large and small stocks add up to 19 per cent, U.S. stocks come in at 21 per cent and international stocks at 16 per cent. Another 7 per cent goes to U.S. and international small-cap stocks, and 6 per cent to cash. Want to keep things super simple? Just put one-third of your equity holdings each in Canadian, U.S. and international stocks.

Global diversification makes good sense in any market conditions, but Canadian investors often don't follow through. Maybe energy stocks running out of gas will change that.