TOP STOCK PICKS FOR 2023.

Take a bow, Frank Jolley! The veteran Rocky Mount investor pulled off an amazing feat, selecting three stocks that paid off during a bloody year in the markets. Shares of Jolley's picks--Novartis, Nutrien and Honeywell--have each increased over the last year, through mid-December. The S&P 500 Index tumbled 17% in the same period.

It continues a history of success for Jolley, who has participated in Business North Carolina's annual feature for many years. His typical approach is to favor well-capitalized companies that are out of favor and avoid the more speculative names.

Our other stock pickers hope that no one paid attention to last years story. Only one of last year's 12 other stock picks showed a gain: Walmart, which increased 1%. Ten companies declined more than the S&P Index, including nine that lost more than 25%.

But these folks are gamers, willing to share their thoughts again because investing is a long-term activity. The companies have to be based in North Carolina or have major operations here.

LESSONS LEARNED

Panelist Ann Zuraw made three picks for BNC in 2021 that bombed this year. Don't beat her up: She's had success in previous years. But the experience prompted her to share these key investing principles.

1 Diversify. Do not have a portfolio of only three stocks.

2 Enforce stop-loss rules. While I worked for Bank of America, the trading desk sold a stock if it declined 20%. It was no longer my decision.

3 There are always market cycles. When everything has been too good to be true--then it is.

4 Know your risk tolerance. It is better to go for base hits and not a home run.

5 Keep investing in public stocks and bonds. Real estate and private equity have done well, but both are illiquid and entail long-term risk.

6 Define honestly what long term means to you. My definition is five-plus years.

7 Never give up. Keep studying opportunities. We can figure it out together.

FRANK JOLLEY

Managing director and co-chief investment officer Live Oak Private Wealth Rocky Mount

BANK OF AMERICA (BAC)

MARKET CAP: $254 BILLION

DIVIDEND YIELD: 2.8%

Higher interest rates and client-centered technology and digital offerings position Charlotte-based Bank of America well for the coming year. BofA trades at 10 times earnings. We believe fears of recession and credit fears are priced in the shares, which are down more than 35% from the 52-week high.

TARGET (TGT)

MARKET CAP: $68 BILLION

DIVIDEND YIELD 2.9%

The general-merchandise retail company's...