Since I have to invest in mutual funds to get work to match my payments, I do. American Funds are decent and about the cheapest fees available.
A mutual fund is a mixture of different stocks/bonds generally with a somewhat similar theme (company size and/or company growth) but not necessarilly similar markets (so you might have a mixture of technology, food, energy, etc). So if one stock does poorly, the rest may very well make up for it. Then I get a mixture of funds to have some small companies/some large companies, some domestic/some foreign, some growth/some value, and a bit of bonds to balance things out.
However, if I were to invest in one stock it would be AMD since I feel I know its market better than any other company and since it has violent stock price swings (meaning lots of potential for profits). I would definately buy AMD in the low teens (say anything below 12.5). I would definately sell AMD in the upper teens (say anything above 17.5). In between that range would really depend on the near term outlook. If I had followed that pattern which I've publically stated here at Anandtech, I would have doubled or trippled my money over the last two years.

Too bad I didn't have the spare cash to do so.