I wouldn’t recommend investing yourself, unless you are in it for the long haul. I prefer the technique of buying stocks for products which I use and like. If you like Apple computers, buy Apple stock. Other than that I would agree that you may as well just buy an ETF. And track the market. If you are looking for ways to hedge against economic downturn or other events which are discussed here, I would suggest holding your money in a saving account until you read not a simple book, but are able to get through 3 or 4 complex ones and fully understand the implications of your trading.
Wall street is basically a casino, so the only real question is how much are you willing to gamble with, and will you bet on yourself or on the house. Betting on the house would generally be considered prudent, basically buy and hold, for the long run.
If you think the market is likely to decline in the near term, I would recommend looking into other investments other than the stock market, don’t “short” or buy inverse funds. Check out gold or stable foreign currencies, there are ETFs which you can purchase for either and are probably much safer than a short, as they are not inversely correlated to the US stock market, but may continue to gain regardless of the state of the stock market.
Investing does not have to be “the stock market”, I urge you to explore alternate investments that are much easier to understand for the novice investor. I would look for a book who teaches how to attain your goals, rather than perform technical feats.
Regardless of the state of the market, sell you options as soon as they are profitable. It is generally considered a bad idea to own the stock of the company for which you work. Think worldcom, enron, you might lose your job and all of your investments at the same time.
