Investing in common stock can be a very lucrative activity; it can also be a disaster. The chances of making money are enhanced by knowledge and research (all legal, involving no inside information), economic developments, and pure luck.

oil and gas

The aforementioned list includes four energy, two high tech, one fashion, one real estate, one used car, and one engine company. One comment relating to this list is that non-diversified energy exploration related stocks have high potential, but also have significant operating risks.

A plethora of advice and recommendations is available to investors ,and this piece will present an overview of the stock investment environment, a strategy that investors might consider in 2013, and 10 recommendations by a well-known analyst. The latter will afford investors a sense of what issues make stocks attractive. Please keep in mind, that if you asked 100 advisers for their top picks for 2013, you would receive a wide range of suggestions.

Warning: The writer is not making any stock recommendations. You should conduct your own research and consult with a licensed financial advisor before making security investments. The information provided herein is barely a microcosm of the information available to investors.

2013 has the potential to be a very volatile year for investors. This does not mean that one cannot make money during the next 12 months. The shorter your investment horizon, the more volatility you will likely experience. Really good companies with outstanding fundamentals that have excellent long-term growth potential can vacillate wildly in the short-term based upon external factors including political and macroeconomic events.

The most important issues are fairly obvious: the fiscal cliff, the debt ceiling issue, jobs growth, overall global economic activity, Chinese economic expansion, the Euro crisis, political turmoil abroad, etc. As these situations subside, the market will produce gains. If they increase, the opposite will occur.

Currently, excluding the fiscal cliff, market analysts believe there is some reason for optimism. A large component is the expectation that China will grow at a 10% rate in 2013. Nevertheless, the issues mentioned above can cause drastic movements in the market by the hour, day, or week.

As a general strategy. one analyst recommends a three-prong approach to stock investment. Invest one-third in each of the following:

1. Stocks that you expect will do well in the current environment (i.e. defense and energy).

2. Stocks that are creating their own trends no matter what the news brings (Apple, Google, and Facebook).

3. A few risky bets that could pay off big because their expectations are so low.

James K. Glassman is the founding executive director of the George W. Bush Institute. He also is a contributing editor to Kiplingers Personal Finance. Glassman has selected 10 stocks from a selection of experts he admires. Using this system, he has beaten the Standard & Poors 500-week index by an average of three points per year over the past nine years. He does not own any of the stocks recommended below. Here are his top 10 stock picks for 2013.

Market Cap: $166 million

Revenues (4 th quarter): $451 million

Net Income: $4.8 million

Business: Diversified printing company

Analyst Ratings: Favorable

Glassman: Speculative stock, downside limited, upside substantial.

My comments: Relatively small company with historical problems. Favorable analyst reports. High upside.

Net Income: $1.4 billion

Business: Medical tech reconstruction, medical/surgical

Analyst Ratings: Mixed, trend towards upside

Glassman: Put stock in IRA for a few decades.

Glassman: Strong balance sheet, very little competition.

My comments: Not very exciting.

Market Cap: $49 billion

Revenues: $132 billion

Net Income: $17 billion

Business: Car company

Analyst Ratings: Fairly good, broad coverage

Glassman: Consistent profits, stock dropped 40% since early 2011, many do not believe company can sustain high profits.

The companies selected by Glassman would not have popped up on my screen with the exception of Kimberly-Clark and Comcast. Several of the companies are small in revenues and profits and some are esoteric. Nevertheless, Glassman has a good track record and time will tell whether he is on the money.