"The problem is that we tend to think of 'risk' as a fixed concept—that is, stocks are riskier than cash and bonds…period. But risk can only be accurately assessed in combination with a time horizon.
If you are 25 and saving for retirement, you have at least a 40 year time horizon, which drastically changes what is risky and what is safe. Millennials are making decisions as if they were 60 years old, on the verge of retirement—and it could cost them huge amounts of wealth."O'Shaughnessy went back to 1920 and calculated the average real growth of stocks and then looked at different time horizons of investing based on age. Not surprisingly, investors who start out in their 20s have time to weather the downturns and come out way ahead of older investing groups.