Using Index Funds
If you are just getting started investing you may want to look into index funds. Most mutual funds have advisors that are constantly monitoring the market and trying to make decisions that help the fund perform better. For a variety of reasons this is not often accomplished once the fees that the funds charge are accounted for.
Index funds don't rely on a manager to decide what stocks to own. Instead they simply try to match a market index like the S&P 500.
There are several advantages to this approach. This means that there is no money in research costs and expenses can be kept very low. The fund structure ensures your performance will closely track what the market does. You typically get a lot of diversity from the wide range of stocks own. It is also nice to hear on the news how your funds are doing (almost every news broadcast quotes what the Dow Jones and S&P 500 did every day).
There are disadvantages to consider. By spreading your funds over such a broad array of stocks you've increased your safety but you've limited your ability to achieve very large returns. If you are investing a significant amount of money you need to be sure to spread your purchases out over a period of time to avoid the risk you assume by investing all at the same time. If you are close to retirements, or whatever other investment goal you have, stock market risk may not be appropriate for you.
All things considered these funds are a good way to get used to the market while you decide what your philosophy looks like.