How might one create custom "Smart Folders" in Outlook 2011 Mac?

There is a good description on this site:

1. Click into the search field
2. A new ribbon called search should appear; click on it
3. Click Advanced and create your filters
4. Click Save; a new smart folder with the name untitled should appear
5. Double click the folder if you want to rename it

Use raw queries. For flagged or unread mails:

(com_microsoft_outlook_flagged = 1) || (com_microsoft_outlook_unread = 1)

Important note: Do not use this folder with the "mark as read immediately" option, as seen here:

This results in a continuous mark as read -- remove from view -- show next message -- mark as read cycle, until everything is marked as read and you have no idea what you've now missed. Instead, I've switched to the 2nd option displayed that marks as read when you select a different message.