Columbia Management

Outlook on the financial markets and economy

Despite the challenges and surprises of 2011, we see pockets of strength — and as a result, attractive opportunities — both here and abroad for 2012. We hope to help you capitalize on these opportunities within this annual publication.

Read 2012 Perspectives

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Read the complete book for investment ideas and articles based on five key themes:

Investing in better balance sheets: Whether looking at a company or country, we believe the strength of its finances is a good indicator of which investments can survive and potentially thrive in a time of economic uncertainty.

• ASEAN as a promising investment opportunity
• Three reasons emerging markets may be stronger than developed markets
• The demographic winners and losers in the emerging markets
• The long-awaited rise of China’s rural income

Income-oriented equities: Yield is scarce while the need for income is high. We continue to believe that companies with a track record of paying healthy dividends are better positioned to meet their obligations, provide income and invest in themselves despite trying economic conditions.

• The evolution of dividend investing and the rise of non-traditional dividend sectors
• Why investors should focus on cash flow and dividend growth
• For income and growth, consider a flexible approach

Scarce growth: Not every investment today reflects the broader conditions. Some emerging economies, sectors of the developed markets and select companies with strong fundamentals have the potential to provide investors with growth opportunities.

• Finding scarce growth in a low-growth world
• Waiting for Superman?
• The case for high yield
• Corporate profit margins: Will pricing discipline hold and…is it enough?
• The argument for balanced growth vs. pure growth in the small-cap arena
• Selective opportunities in technology for 2012

Short-term bonds: We see a demand for short-term investment solutions, which have historically shown minimal price volatility. These strategies are designed to provide much-needed income while staying focused on the goals of preserving capital and minimizing downside market and interest rate risk.

• The future of corporate bond market liquidity
• Opportunities in MBS: Favorable fundamentals and valuation backdrop
• Opportunities in the bond market: Investing in better balance sheets
• U.S. interest rates: More of the same in 2012

Tax-exempt income: Despite dire and inaccurate predictions about state and local defaults, the municipal market continues to offer attractive investment opportunities and compelling after-tax yields.

• Municipal market: Smooth sailing or rough waters ahead?

Other Perspectives topics:

• The big question: What are the odds of recession?
• Understanding the different: A primer on alternative investments
• The lost decade of growth
• Finding opportunity in energy and basic materials
• What quantitative strategies will lead in 2012?
• Three reasons to remain bullish on REITs

Read 2012 Perspectives

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The views expressed are as of the date given, may change as market or other conditions change, and may differ from views expressed by other Columbia Management Investment Advisers, LLC (CMIA) associates or affiliates. Actual investments or investment decisions made by CMIA and its affiliates, whether for its own account or on behalf of clients, will not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not account for individual investor circumstances. Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon, and risk tolerance. Risks include stock market fluctuations due to business and economic developments. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results and no forecast should be considered a guarantee either. Since economic and market conditions change frequently, there can be no assurance that the trends described here will continue or that any forecasts are accurate.

Columbia Management Investment Advisers, LLC and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.