Charlie Cook On Air: Music Row Investments

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CCook-onair-smTax time is right around the corner. Most of us are looking at our budgets and making adjustments to spending and savings. This is the time of the year we look at our investment portfolios and readjust the percentages. Maybe we want a little more in stocks and less in bonds, as they appear to have maxed out their yields. I thought I would do the same with the Country Music portfolio for 2013.
Last year the hot stocks were Luke Bryan, Eric Church and Jason Aldean. Miranda Lambert was like a municipal bond that we bought in 2009. She just kept paying off year after year. All growth and no downside. If you watched the CMA awards shows from around 2006 on, you knew that Lambert was going to be a fund to buy and hold for years. Your investment has paid off handsomely.
Bryan and Church were like IPOs last year that had built a base in the last few years. They were ready to come onto the market in 2012 and BAM! Both came out hot and got hotter as the year progressed. What does 2013 hold? Kenny Chesney loaded up on all the Church stock he could get his hands on for 2013 so he looks like a great bet.
Aldean is a blue chip stock that you can buy and leave alone for years. Just collect the dividends year in and year out. If you bought Blake Shelton at the beginning of 2012 you made money. There is concern that inflation is on the horizon. It makes sense to have a few stocks that are protected against inflation. Shelton is one of them because he is so diversified, not only radio but TV, Concerts, chart-topping records and marketing (Twitter). I would continue buying Blake.
It is always good to invest in some small caps. You can get real growth out of these small caps because the upside is so high. Bryan would have been a small cap in 2010. Look at him now. Small caps for 2013? Hunter Hayes and Jana Kramer would be a couple of picks. I would also put some money into Kip Moore, Casey James and Dustin Lynch. If you want a runner pick, try Florida Georgia Line.
I think we want a few more blue chips to balance the portfolio. How about Carrie Underwood, the aforementioned Chesney, Tim McGraw and what about the Google of Country Music, Taylor Swift?
Even with the military being cut back under the current administration, I like to be in defense stocks. This is a crazy world and having a foot in the defense sector seems like a good idea to me. I would buy some Lady Antebellum, a little Zac Brown Band and Rascal Flatts. This will protect you against missing out on big hits.
I am not a great stock picker and trying to unearth a penny stock that makes your portfolio a big gainer is very difficult. Perhaps being in a fund is the best bet. How about a fund that is called Country Music. That sounds like a winner to me.
(The views expressed in this article are those of the author and do not necessarily reflect those of MusicRow.)

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