Maximize your 401(k). If you can swing it, you are able to contribute $15,500 annually into it. It's pre-tax dollars, so it doesn't really hurt the paycheck too much.
Diversify the investments within it. Try to put about 20% into 5 different equities based mutual funds each. Some large cap, some mid cap, some foreign, and perhaps some in small cap. Most should weigh on the large cap side, though.
Open a Roth IRA, (above and beyond the max in your 401), if your combined family income is less than $150,000. If it is above that, then put the additional money directly into mutual funds.
Don't sweat short-term market slowdowns. They are necessary, and allow you to buy shares more cheaply. It will pay off later.
Typically, if your under 50, the above advice works well. If you are above 50, you will want to diversify a bit more conservatively, (larger amount in bond-based funds.
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