1) I currently have a small amount of money in a Mutual Fund, but no stocks.
2) Bought them before the crash before this one. Supposed to be part of my college fund.
3) Trading is a lot like poker. Active trading is speculation, not investing. If you want to invest, buy and hold. Trading is a zero-sum game, every dollar you make by day trading and the like is lost by someone somewhere else in the market.

If you only have a few thousand, day trading is not for you, as you won't have the bankroll to be able to weather bad bets, even if you leverage yourself. If you only have a few thousand, you also won't be able to really buy a diversified portfolio to buy and hold. My personal finance instructor recommended that you hold at least 30 different companies, from different industries, as stocks do not move in "lockstep". A well diversified portfolio will help weather downturns such as this one, as some stocks do well in bad economies (think Meineke), where others need a good economy.

The best solution then is probably to purchase shares in a mutual fund. Find one that has the lowest fees for the type of diversification that you want. You should find a fund that has very diversified holdings, and one that has steady performance over years. Read the prospectus to get an idea of the funds goals and risks. Strong performances over a short term can often indicate larger levels of risk than what you might want.

Consider all investment advice carefully, and discuss all options with a qualified broker. I am not a broker, and I do not intend this to be taken as qualified investment advice.