NEW YORK (TheStreet) -- Oil prices continue to weigh on U.S. stocks Monday. But the market can handle volatility in commodities, said Josh Brown, CEO and co-founder of Ritholtz Wealth Management, on CNBC's "Fast Money Halftime" show. But when there's perceived systemic instability, investors tend to get skittish.
In 2015, volatility is likely to pick up and rates should remain low, said Nili Gilbert, co-founder and portfolio manager of Matarin Capital. Her top picks include Ameriprise Financial (AMP) , Lowe's (LOW) and Overstock (OSTK) . Investors should stick with high quality companies, she said.
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Falling energy prices can wipe out investors and fund managers too highly leveraged, said Pete Najarian, co-founder of optionmonster.com and trademonster.com. Look for buying opportunities in high-quality stocks that are getting caught up in the selloff but aren't related to oil, he advised.
Investors are making too much of the stock selloff, said Tobias Levkovich, chief U.S. equity strategist at Citigroup. He said 11% of the S&P 500's earnings are from energy stocks, but consumer and staples stocks make up 19% of the index. The selloff in energy was a good thing at first but now oil prices need to stabilize before investors can buy energy stocks.
Exxon Mobil (XOM) is down 17% from its highs but is outperforming most of its peers. However, its slow production growth makes it a less compelling pick, says Stephanie Link, chief investment officer of TheStreet and co-manager of the Action Alerts PLUS portfolio. Instead, look at Royal Dutch Shell (RDS.A) , an AAP holding, as well as Marathon Oil (MRO) and ConocoPhillips (COP) .
Investors looking to dip into the energy sector should stay diversified within the industry, Gilbert said, pointing out that refining stocks have outperformed the sector during the selloff.
Najarian isn't a buyer of energy stocks near current prices, but some stocks -- such as Schlumberger (SLB) , Chevron (CVX) and ConocoPhillips -- are starting to look attractive. Brown said investors should simply buy the Energy Select Sector SPDR ETF (XLE) .
Michael Kelly, securities analyst at Global Hunter, said U.S. production needs to slow for oil prices to rebound. There's likely some form of support near $50 per barrel. The bottom is likely close when oil stocks stop declining, at the same time that oil prices continue to move lower, he reasoned. His top picks include Concho Resources (CXO) , Carrizo Oil & Gas (CRZO) and Synergy Resources (SYRG) .
Twitter (TWTR) was upgraded to market outperform by JMP Securities. Brown still likes the stock but he is concerned user growth may be slowing. Once management gets the ad product right, the stock should recover. Najarian added that the company is still in the early stages of monetization, and all of the company's shortcomings shouldn't be blamed solely on CEO Dick Costolo.
Revenue at the AAP holding are expected to grow 70% in 2015, accompanied by expanding margins, according to Link. The company's ad loads currently stand at 1.5%, compared to Facebook's (FB) 5%, so there's a lot of room for improvement. The fourth quarter's weak expectations are priced into the stock, she reasoned.
-- Written by Bret Kenwell