As we are into the eleventh year of the current stock market bull run, many investors are getting worried we might be approaching the end of the current market cycle.
Yes, markets generally go up (as we all would know by now), but eventually we see corrections and crashes. Sometimes it's an economic recession that throws a spanner in the works, but other times it's just the markets getting ahead of themselves and biting off more than they can chew.
Regardless of the cause, corrections and crashes can be very painful for investors, especially those who are capital conservative or nearing/in retirement.
So, here are 2 ASX shares that I think are particularly resistant to a stock market crash.
Coles Group Ltd (ASX: COL)
Coles needs no introduction as one of the largest supermarket chains in the country. Since Coles sells food and other household essentials, it can boast a business model that is extremely resistant to any changes in the economic cycle (we all have to eat, after all).
I do slightly prefer Coles' competitor Woolworths Group Ltd (ASX: WOW) from a fundamental level, but the Coles share price has a lot less room to fall (in my view) if things go pear-shaped with a P/E (price-to-earnings) ratio of 21.2 (compared with Woolies' 38.25).
Coles also pays a healthy dividend, which again I don't think will come under threat in crash-like or recession conditions for the above reasons. All in all, Coles is a company I would be very happy having in my portfolio during a stock market crash.
iShares Global Consumer Staples ETF (ASX: IXI)
This isn't one share, but an exchange traded fund (ETF) that holds a basket of international shares. More specifically, this ETF tracks a global consumer staples index – which holds companies that make or sell foods and other items that people consistently buy rain, hail or shine.
With this fund, you are getting names like Proctor & Gamble, Coca-Cola, Walmart and British American Tobacco – all huge companies that display recession-resistant characteristics.
Although IXI is heavily weighted towards the US (52.27%), you also get significant exposure to the UK, Switzerland, Japan and France amongst others.
If I had to choose one ETF to hold through a stock market crash, this would be it.
Foolish takeaway
Although no stock can be completely crash-proof, I think these two ASX shares are some of the best options out there.
