Here is one of my all time favorite financial charts:
So, historically, if you had a 20-year time horizon, there was 0 risk investing in equities (as represented by the s&p 500 index)
When this chart is shared with retirement investors, many respond to this data in 2 ways:
1) Who in the world has a 20-year time horizon?
2) This is the past, how can we be sure it will be the same in the future?
To the first point, I would say the majority of investors have at least a 20-year time horizon, at least actuarially. Certainly, a Millennial or Gen Xer does. A 58-year-old in average health does. Even a married 65-year-old couple has a joint time horizon of 20 years.
To the second point, I would say that the past does not guarantee the future but generally speaking, in material/economic terms, things have always improved over time. The historical price of the S&P, in 20 years increments, has been as follows:
So to think the next 20 years will be worse than any in history is just not rational.
So the big mistakes are thinking our investing time horizon is shorter than it really is and thinking the next 20 years will be economically worse than any in history. These 2 big mistakes lead to inappropriate investments decisions and behaviors that worsen retirement outcomes.