I agree that buying indexes of the market (or at least a major part of it) is a good way to get instant diversity when you're starting out. I would stay away from individual stocks until you begin to learn the game. Silver DJ advice of getting cheap indexes, dividend payers, and planning to hold long term is the ideal beginner (and possibly only) advice you need.
Vanguard is very good generally; the main thing you want to look at for any company is expense ratio (aka management fee) on their index funds.
That VHY looks like a pretty good one for the Aust market... fees a tad n the high end (I like 0.15% or less for indexes) but not unreasonable for an international. If you want US market, VOO (s&p 500 tracker, 500 biggest companies) and VTI (total nyse market) are good, popular, and very low cost with expense ratio of 0.04% each. SPY (0.09%) is another popular one for s&p 500, although not by Vanguard. VWO is Vanguard's popular emerging markets ETF (0.14%) and VEA is their developed markets (0.07%) one. I tend to prefer ETFs to mutual funds since mutual funds have more sneaky ways of hiding fees, but either can work.
You can pretty much end the story right there is you want to... buy good index funds, add money periodically, reinvest dividends, and watch them grow. Done.
If you enjoy the market and spend time learning about p/e, dividends, sectors, earnings announcements, etc... then you can take chances on individual stocks and be more aggressive. Stocks are nice in that they have zero ongoing fees (just any trading fee when you buy or sell). Your variability will go up due to more volatility, but so can your profits. Something is only "risky" if you don't understand it or don't have the money to potentially lose. It depends what you like, though.
Driving 125mph (200km/h) is scary and dangerous as hell for most people, but for racing professionals, that's only the first warmup lap. The vast majority of people are best off staying in the shallow end of the swimming pool when it comes to stocks and markets. And frankly, with how cheap and easy indexing is now, you can get fine returns that way with very little time and moderate risk. There really is no reason for the middle or deeper end of the pool unless you really enjoy swimming as a hobby. Can you do better with more advanced stock picking and maybe covered calls or other options, even shorting? Sure, but it takes much more time to learn and adds much more risk. Unless you have experience, have money you are prepared to lose, and think stock-picking is a fun hobby... indexing is usually the way to go.
If you do decide you enjoy it and want to start picking your own stocks/sectors, it is usually best to do that in your own country's market... and go slowly. Those companies are more familiar to you, easier to keep track of news on them, and usually lower trade fees. I own nothing but single stocks and a few small sectors in USA stocks... but conversely, I own nothing but almost total market indexes for my international stuff. I have the odd European or Canadian or etc single company stock, but those are usually large established companies that also do significant business in my own country. GL
