Carrie:

Sure, imaging the worst bear market you can think of: Say it's 1929 and the markets are plummeting. You won't retire until 1969. Yes, you'd lose money on your investments for the next few years (I'm not a market historian--somebody help me--when did the markets hit their nadir? 1933?). But if you continue to invest while the market is down, you are "buying low" and by the time you retire you'll be able to "sell high."

Well, the inflation-adjusted, dividend-reinvested S&P (back then S&P90) was about the same in 1950 as it was in 1929.  Twenty years with 0% returns?  Buying at the top hurts.

IMHO the current love affair with equities and mutual funds is based on mainly people looking at nominal rather than inflation-adjusted returns, and also looking at only the last 20 years or so which cumulatively have been the modern equivalent of the South China Sea bubble.  But I could be wrong ;)

Further reading...
 http://www.amazon.com/Bear-Book-Survive-Ferocious-Markets/dp/0471197181