It's time for poker players to start putting their money to work.

[lala]

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I will give a little advice, but you have to understand that your questin is like asking -- How do I play jacks in no limit hold'em? Please answer in 5 sentences or less...as you know, its much more nuanced and situation specific than that.

I am talking about developing lifetime habits of saving and investing, as well as developing a lifetime relationship with a financial advisor (something that most people desperately need and few do).

That said, in response to your specific question...investing in index funds is much better than buying individual stocks for an investing novice. During most environments it is hard to go really wrong this way. You are rarely going to make big returns (e.g. 40%+), but the same can be said of big mistakes.

The key caveat is that every 15-50 years we end up in an environment where even indexing is dangerous. The year 2000 was an obvious case...many people began indexing to the Nasdaq during this period and lost 80% in short order. I cannot tell you in an internet post how to identify when you are in an environment with the potential to inflict this kind of damage. My current opinion is that we are not in that kind of environment today.

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well diversification is the key when buying index funds. Anyone who lost a lot in 2000-2002 was just gambling in tech stocks/megacap, and a diversified portfolio with large/mid/small/int'l funds would have held up a lot better during this period.