Having read this thread and as a fellow Canadian, I would suggest you read Shake's primer Shakespeare's Primer
and in particular the sections on Asset Allocation, Cost Control and Portfolios. There is a lot of really good information there with most of it quite straightforward.
You can implement a very cost effective index mutual fund portfolio uing TDW e-funds (with TDWaterhouse) with as little as 4 index mutual funds. You can do a similar thing with index ETFs at slightly lower cost than the TDW e-funds. The advantage with ETFs is that there are many to chose from.
You can chose 4-5 CAD ones with Barclays IShares (Canada) as in for example XIU or XDV (for dividend bias) for Canada equities, XIN and XSP for International and USA equities respectively, and XSB (short term bond) or XBB (long term bond)for your fixed income allocation. You could also implement a simple 5 year GIC ladder (instead of XSB/XBB) for your fixed income component if you do not have the stomach for variations in capital value of your fixed income component.
Instead of using XIN and XSP for your ex-Canada component, you can buy US domiciled ETFs in USD off NYSE/American instead. The popular choices are Barclays (USA) and Vanguard. For example, with Vanguard (my personal favourite ETF company), you can cover the USA with either VTI (Total Market) or IVV (S&P500) or VTV (value slice of the US market), and VEA to cover Europe, Asia and Pacific (or VGK and VPL to cover Europe and Pacific in different slices separately).
Investing does not have to be complicated. There will always be market volatility. The current 'correction' is quite tame compared to other drops when you look at this http://www.gummy-stuff.org/SP500-up-down2.gif
You need to think about your ability to weather ups and downs and fit your asset allocation accordingly, e.g. is it 60/40 equity/fixed? or is it 40/60 equity/fixed?
P.S. I agree IG is not where you want to be. Their IG mutual fund performances are mediocre at best and have very high MERs. I put them and Edward Jones in the same bucket. Lots of sweet talking individuals with a lot of glossy brochures, presentations and hand holding, but short on performance.