2012 Outlook

While the last few years have been highlighted with record swings in market returns and widely oscillating economic data, we expect 2012 will be less about the fringes and more about the middle. While moving away from the drastic extremes will be a welcome environment for whipsawed investors, the center offers its own distinct challenges and opportunities. In 2012, finding a middle ground, or Meeting in the Middle, is going to be key for growth in the markets and economy. We believe that:

• The U.S. economy will grow about 2%, while emerging markets post stronger growth and Europe experiences a mild recession.
• The U.S. stock market is likely to post an 8 - 12% gain, supported by a slight improvement in valuations and mid-to-high single-digit earnings growth.
•  Corporate bonds post modest single-digit gains as interest rates rise and credit spreads narrow. The yield on the 10-year Treasury is likely to end the year around 3%.

 In addition, the ongoing European debt dilemma and the 2012 elections hold meaningful consequences for investors. The enclosed Outlook 2012 reveals what investors can expect in the coming year and how to position to seek to profit from the opportunities and protect from the risks. As always, if you have questions, I encourage you to contact me.

2012 Outlook

Best regards,
Andrew Macdonald

andrew.macdonald@lpl.com
 Macdonald Financial Services
4025 St Cloud Dr, Ste 250
Loveland, CO 80538
(970)667-2950

LPL Financial, Member FINRA/SIPC