The stock market, a more diversified play:

Ok, everyone knows the market is at a low (even after its short rally today) and I think most people expect it to be up from now over the next 6 months to a year. How can we make the most money off of this belief?

Here's a couple of ideas:

1. Look at all your options, including index options (yes I love puns, but I generally restrain myself). Bullish option trades are buying calls, and writing (selling) puts. While writing puts may net you the most money, it can also lose you a disproportionate amount. Lucky for you, if you've got no business writing puts, most brokerages won't let you anyways. Buying calls on the other hand, only put at risk the amount you spend on the option. Buying a call on an index such as the S&P 500 could pay off greatly, but you also have a good chance of losing a good deal if not all of your investment.
2. More conservatively, one could buy an index fund. I prefer ETFs (exchange traded funds) when buying index funds, because expenses range from half to 95% of traditional open ended funds, and I can name my price with a limit order and generally get same day execution. (When using regular mutual funds, I'd try to buy on a down day, which could mean several days or weeks before I'd buy...) A specific trade might be the heavily traded QQQQ which buys the Nasdaq 100, but if you want to buy the whole market, I'd recommend a broader approach. VTI attempts to buy the entire stock market (reading the fine print, it only buys 1300 of the largest stocks).
3. There are also ETFs that call themselves "Intelligent" index funds, which use a standardized screening approach to attempt to outperform their related indexes. These screens generally take advantage of the long term outperformance of value bias related measures. Since value as a strategy is out favor at the moment, moving more towards a value based strategy would be likely to pay off as the economy turns around. This is my second favorite strategy here.
4. Finally, my favorite strategy would be to focus on the stocks that have led this downturn: financial stocks. Not buying the individual stocks, like Merrill Lynch or Citi, but buying sector based ETFs. A volatile approach would be to buy UYG, which offers the financial sector at 50% leverage daily (twice the performance less expenses...). A more conservative approach would be DRF which sort of combines this approach with the previous in screening for high dividend paying international finance companies. The purest play is XLF, which actually has a higher yield because it's going to focus on only domestic financial corporations. So I'd go with UYG (if you can tolerate the volatility) or XLF (which is the pure investment.)

I hope this gives you some investing ideas, or the confidence to take the plunge if you've been on the sidelines.

Good luck!

Aaron