Retirement mistake #2 is using a "market beating" broker or adviser.

Achieving paltry returns is not easy. After all, historically, the market rises over time.

What accounts for dismal investor performance?

Trusted "financial experts" who tell you they can pick stocks or mutual funds that will beat the benchmark indexes. They also give advice about when to get into the markets and when to flee to safety.

This is nonsense.

Markets are random and efficient. All information about stocks is publicly available. Tomorrow's news sets prices. No one knows tomorrow's news.

It's bad enough that market-beating brokers and advisers are emperors with no clothes. It's worse that the cost of their services and of the funds they recommend practically ensure subpar returns.

Some $4 trillion of trust and pension money does not fall into this trap. The managers of these huge portfolios invest in a globally diversified portfolio of index funds, using an appropriate asset allocation. Over time, they are in the top 5% of all professionally managed money.

Retirees should follow their example.

See all ten of the biggest money mistakes a retiree can make.

Dan Solin is the author of the newly published book, The Smartest Retirement Book You'll Ever Read (Perigee Books 2009). His prior books include the New York Times bestsellers, The Smartest Investment Book You'll Ever Read and The Smartest 401(k) Book You'll Ever Read. See SmartestInvestmentBook.com. Read more about Dan Solin.