These are trying times. Being in cash is safe and feels good, but with the dollar's value slowly disappearing on a daily basis and virtually zero interest rates on savings, not a great place to be for too long.
Many other investment opportunities are looking a bit overbought, including stocks and commodities, which have enjoyed a strong run-up over the past couple of years. Bonds (especially US Treasury securities) are concerning, given signs of inflation brewing and historically low yields. Where, then, to invest? For now, the best course of action may be to do nothing until we have a better idea of where unemployment, housing and the economy in general are headed. While things aren't as bad as they were three years ago, they aren't that great either. Unemployment is stubbornly high. Housing, which typically leads the economy out of recession, is still very weak. The overall economy is barely showing growth. Some are even calling a "double dip" recession now.
In the meantime, I really like the oil & gas master limited partnerships, where you can get a 7 - 8 percent yield with commodity upside (energy will always be in demand and over time, this is a great long term investment). You also get tax deferral on most of the cash distributions you receive. Plan to buy and hold these investments. If you sell, you have to pay ordinary income taxes on the portion of the distributions that were not previously taxed in addition to the capital gains taxes you normally pay when selling any stock - a major bummer at tax time. Also, the work required to incorporate these into your tax return is substantial, so be prepared. Most of the major banks/investment companies have sector reports on master limited partnerships that are good to read for an overview of the industry and to help you select a few to invest in.