The S&P/ASX200 has enjoyed a roaring start to 2019, closing out the week higher at 5,905.6 – an increase of 6.26% since the start of the year.
Despite the solid early gains, market volatility seen in late December has returned in January as concerns over the US-China trade war and a hard Brexit couldn't be dampened by any amount of Christmas cheer.
Globally, my view is that these structural headwinds are unlikely to subside anytime soon, with a weaker dollar, falling housing market and lack of wage inflation key concerns facing the Australian economy throughout the first half of the year.
I've selected my top ASX Consumer Staples stock below that I believe can form the cornerstone of my "2019-proof" portfolio in anticipation of higher volatility and a waning economic outlook.
Wesfarmers: The Stability Stock
I really like Wesfarmers Ltd (ASX: WES) as a stability prospect looking ahead in 2019. The Wesfarmers share price closed at $32.86 on Friday, representing a 4.15% year-to-date increase for investors – particularly pleasing given I've picked the stock just to hold its own and provide some capital stability.
Wesfarmers had an incredibly active 2018 on the M&A front as CEO Rob Scott looked to divest several key assets for the Perth-based conglomerate. Chief among these were the August 2018 sales of Kmart Tyre & Auto Service for $350 million and pleasingly for ethical investors, its stake in the Bengalla coal mine for $860 million, as the company divested its last remaining interest in the coal industry. We also saw Wesfarmers spin-off its former acquisition Coles Group Ltd (ASX: COL) whilst maintaining a 15% equity stake as it has streamlined its business to focus on core earnings areas going forward.
Wesfarmers is yielding an incredible fully-franked 6.38% by my estimates, and whilst there are higher-yielding stocks within the ASX200 such as Alumina Limited (ASX: AWC) offering a whopping 10.2%, Wesfarmers is offering a much more attractive yield than rival Woolworths Group Ltd (ASX: WOW) at just 3.37%.
As my stability pick, capital preservation is really what I'm looking for as the cornerstone of my portfolio, so mild capital growth and an above average dividend yield is a double bonus in my books.
Having laid the foundation for my "2019-proof" portfolio, it's time to decide which growth stock I'm after to add some capital growth potential and Syrah Resources Ltd (ASX: SYR) is looking pretty good in my books.
