Bad days happen. What’s important is whether or not the markets stabilize from here, and how vulnerable our investments will be if they don’t. 

Trusts fall into two groups when it comes to exposure to a potential US financial crisis. Energy producing trusts are by far the more vulnerable, for the same reason that all energy stocks are.

An economic crack is one of the very few things that can stall this energy bull market. Should one occur, it still would have only a temporary impact on the real driver of higher oil and gas prices: Tight global supplies and the shift of market power to producers from consumers, who held sway during the 1990s. But it could knock down oil and particularly gas, which remains largely a domestic market.

Presumably, that would cause more damage to the gas-leveraged plays I highlighted in last week’s Flash Alert. Thursday’s earnings announcement from Precision Drilling (PD.UN, NYSE: PDS), for example, clearly shows how horrendous conditions are in the gas patch, and how it’s hurting the trusts involved there.

Another hit to gas prices would likely do more damage. Interestingly enough though, Canadian Edge’s most leveraged natural gas play–Paramount Energy Trust (PMT.UN, PMGYF)–was actually up on Thursday, a day the Dow fell more than 300 points. Both Precision and Paramount are cheap and will turn up sharply when gas prices do. But no one should own them unless they’re ready to risk more volatility, as well as potential dividend cuts.

On the other hand, the strongest energy utilities that make up the majority of the CE Aggressive Portfolio are far better protected and already cheap. And the non-energy trusts in the Conservative Portfolio should prove safe havens in the wake of US market turmoil.

The only other way we could be hurt here is if an unfolding crisis slams the door on private capital takeovers of trusts. The size of premiums on recent deals is a pretty good indication that trusts on the whole aren’t being bid up on takeover rumors. That should limit risk, though this is another clear warning why no one should buy a trust for a takeover if they’re not willing to hold on if no deal occurs.

The bottom line is quality. Even if you own only the trusts backed by the strongest businesses, there’s no guarantee your holdings won’t sell off on a bad day.

But sticking to quality is the best way to ensure the damage will be short-lived, no matter how nasty and brutish. That’s the key to weathering tough markets as a long-term, income investor.