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Christine St Anne is Morningstar's online editor

Last week's article, Another year of disasters, looked at whether 2012 would be as painfully eventful as 2011. Investment managers predicted (as expected) another year of uncertainty and volatility as Europe continues to reach for a solution and a possible slow-down in China.

In this article, a number of managers believe there are still opportunities despite the uncertainty and volatility.

BlackRock Investment Management director James Holt says it is important that investors separate the markets from the broader economic challenges.

"Over the long-term the correlation between economic growth and market returns has been quite low.  Despite the current volatility, companies around the world still have attractive valuations," Holt says.

Holt notes that there are some US and European companies that are big exporters to the emerging world and it is these companies that investors should focus on.

"These companies are quite cheap and trading at 20-year lows. They are also doing well from growth in the emerging world," Holt says.

While it might seem logical to shy away from equities, AMP Capital Investors head of investment strategy Shane Oliver believes much of the bad news has been factored into the markets.

"In the short-term, it's hard to feel confident on shares and related risk assets, as much uncertainty hangs around Europe and global growth could first get worse before it gets better," Oliver says.

"However, against this, shares are now very cheap particularly against bonds.  That a lot of bad news is factored into sharemarkets is indicated by forward price-to-earnings (PE) multiples which are now 10.2 times for global shares compared to 12.4 times a year ago. In Australia, the forward PE is now 10.9 times compared to 13 times a year ago."

Oliver says investors should focus on sharemarkets with strong fundamentals and monetary easing including Asia, emerging markets and Australia or those with weak currencies and monetary easing such as the US.

While term deposit rates proved attractive in 2011, expect these investments to be less attractive as cash rates continue to fall. 

Oliver also prefers Australian bonds to global bonds because of higher yields and less risk "if things fall apart".

He says that unlisted commercial property returns are likely to remain reasonable reflecting yields around 7 per cent requiring only modest capital growth to generate a decent return.

UBS head of investment strategy George Boubouras says that while earnings growth will slow in 2012, equity valuations are attractive.

"Exposure to quality defensive and cyclical sectors is always encouraged. Quality defensive sectors which focus on income, combined with the discounted valuations in the cyclical sectors, offer investors ample opportunity to construct the appropriate equity portfolio," Boubouras says.

UBS favours exposure to the resources/energy sector and mining services sector.

"Telcos, utilities and infrastructure will continue to offer quality income and feature in our income portfolio," Boubouras says.

Globally, Boubouras says corporate balance sheets remain in sound condition.