With the world swimming in debt, rising interest rates are bound to send shockwaves through the global financial system. This is why we think it is important to play on the conservative side of things for the time being and look to allocate funds to some defensive stocks.
Coles Group (COL) is about as defensive as they get with 800 supermarkets and 930 liquor outlets around the country. So if we get a credit event, it is safe to say people will still be buying food and grog. Plus Coles will continue to enjoy a steady rise in sales on the back of a rising Aussie population which is thanks to record immigration.
Coles shares recently pulled back about 7% after reporting some cost blowouts at various distribution centres under construction.
We think this drop to a big level of support is a buying opportunity.