Where to shelter from the storm

Recent turbulence in the markets should serve as a reminder of the benefits of defensive investing. Charlie Gibson recommends two defensive stocks to sit out the rocky conditions with.

The turbulence in the markets is a reminder of the benefits of defensive investing. Theories abound on the reasons for the sell-off a reaction to China's stockmarket slump, or a tremor set off by fears for the US economy. Whatever the cause, I don't believe it's crunch time. Things may be moving in an unsustainable direction and, sooner or later, something will have to give I just don't think that time is now. If problems in the US property and sub-prime mortgage lending markets have a negative impact on the consumer, then that will flow through to inflation, the authorities will cut interest rates, and we'll go through another cycle, the severity of which will be determined by the Federal Reserve. I could be wrong: the US may be heading for a rather nasty slump. In that case, investors will want to be positioned as defensively as possible.

Defensive stocks: Cadbury Schweppes

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