Vitaly Katsenelson, author of the book, Active Value Investing, believes the markets are range-bound. He discusses the case of investing in pharmaceuticals, and in particular, Pfizer. Pfizer, as you'll recall moved nowhere in the last 10 years (and even lost shareholders money). The patent on Lipitor is expiring soon, and Pfizer continues to invest billions ($11B) in Research and Development. Discounted in the stock is the fact Pfizer has hundreds of drugs in Phase 3.
In short, shareholders get 4% in yield, can adjust to inflation or deflation (through changing prices), can acquire to grow (it bought Wyeth at respectably low multiple, at 10-13x instead of at 20x), and any new drug developed will benefit shareholders at stock price premium (as measured by P/E).
Few investors watch videos on Yahoo, but Yahoo is starting to produce better content again. Below is Katsenelson on Yahoo TechTicker:
Note that Pfizer's R&D spend was $7.767B ending Dec 31 2009. While recent cutbacks, layoffs, and site closures have been hard, the company appears committed to R&D. This is according to Martin Mackay, Ph.D., president of Pfizer PharmaTherapeutics Research & Development in a recent interview.