Ideally, if you're getting ready to retire, most of you assets should not be in the volatile stock market, so it should not affect you terribly.

If you intend to live for 30 years in retirement, shouldn't you still have a good chunk of your assets in stocks?

Many people use much of their retirement savings at the moment of retirement to buy a special retirement-income product. This can have tax benefits over normal investments. So you try to maximize the probability of having a large fund at that moment.

Cheap stocks? To me, everything looks pretty inflated from the QE fun we've had since 2009. What goes up, must come down. And over the past 7 years, stocks have gone pretty far up. Now the party is over thanks to the Fed.

Or, to put it more visually, take a look at the graph of the S&P 500 since 1994: http://i.imgur.com/5Kn5XJM.gif

I think that does a good job of illustrating our problem here.

Have you tried adjusting it for inflation and GDP growth?

Even after that, the S&P 500 should be doing better. Why? Because the S&P500 represents the winners not the overall economy.