windows live mail category loses its names when software is closed

I updated from Windows Live Mail 2011 to 2012.  Each category shows the number of names next to the category, but the category will not work for sending messages. The category shows as empty when used for emailing or when right-clicked to try Edit Category.  I created new categories, but they work only until the software is closed.  Then they are empty (except that they still show a number next to them).