The vast majority of investors are better off with Mutual Funds, and even better ETF's for the purpose of diversification. A portfolio should generally not have more than 3% exposure to any one company. So in order to capture and asset allocation with the proper diversity, individual equitiy holdings make litle sense unless your portfolio is several million dollars.
The ETF market is more cost effective and will not hold you to minimum investment amounts. The mutual fund world is more cost effective if you are on a systematic investment plan, in that you would not pay the transaction fee's. Even though they are nominal with online trading these days, they can still add up if you were attempting something as little as dollar cost averaging $100 weekly.
If you're are just starting out with little knowlege of the financial markets, your best bet is to use an asset allocation fund that takes a balanced approach in concert with your time frame. As your portfolio grows, you can learn to personalize your allocation towards your goals and tax status.