If you have enough cash to invest, and not sure what to do, you can listen to one of the richest man’s advice. His name is Warren Buffett. Buffett has long advised his followers to stick to low-cost, passive index funds, which can offer broad exposure to the stock market and cost a fraction of actively managed funds. When actively managed funds do not perform well, you can blame the fund managers – but you still need to pay the MER (the embedded fee charged by the mutual fund). For index fund, you only have Mr. Market to blame when your investments go bad. And the fee charged by those funds are much lower.
If you are curious about how index funds work, I recommend this article by Moneysense magazine. The portfolio you can make from the various index funds are called the couch potato portfolio and very easy to set it up.
You can automate the purchase every paycheque and utilize dollar-cost averaging too, so you won’t get hurt so much if there’s a sudden market downturn like my cartoon characters.
This cartoon is for sale here, perfect to use in presentations for financial concepts.