If you are leaning towards the stock market/index funds:
1. Figure out how much cash you and the spouse want to hold for emergencies or upcoming large purchases and deem that amount "emergency fund", separated from investments.
2. Since you are concerned about market levels right now, invest the rest over a period of time (24-48 months?) to reduce your risk (this is known as "dollar cost averaging"). For example, if you have $10,000 you would like to invest over 36 months, first plunk down the minimum for the fund, say $3,000, then invest the $7,000 over the remaining 36 months ($194.44 per month).
3. Going forward, figure out how much you have each pay period or month to invest and do it regularly. That way you will dollar cost average over time and reduce your market risk. Add that to the $194.44 per month or whatever you decide.
If that is not specific enough, please provide more information to the mustachians:)