The length of your time horizon has nothing to do with your willingness to take risk. Stock are just as risky in the long run as they are in the short run.
This quotation reminded FLG of a comment Andrew Stevens made on this blog a while back arguing that making risk decisions based on age was questionable. Risk decisions should be made on a person's risk tolerance.
Anyway, FLG just read Bodie's book. In it he argues that the best way to save for retirement, at least to save the minimum necessary funds, is to use TIPS and I bonds. Basically, Bodie says, don't leave anything to chance, instead of assuming average rates of return for a diversified portfolio, just figure out how much you need for retirement and then back into a savings plan in inflation protected treasury bonds. It's one that almost certainly requires more than what a equity-based plan would, but with the added benefit of zero risk. (Assuming Uncle Sam doesn't default, obviously.) Makes sense and all.
Previously, FLG had always figured he'd use TIPS as a way to hedge against inflation while in retirement, not for retirement, but he may need to reconsider that. Then again, FLG is pretty accepting of risk. Maybe too accepting.
UPDATE: One product that FLG did learn about from the book was a CD that returns the rate of private college tuition inflation. Sounds great, until you realize they take a 1.5% margin on the return. Nevertheless, FLG think about this.