Common wisdom claims that government-issued debt is safer than stocks. Treasury bonds are, after all, backed by the power to tax, which removes a lot of credit risk. Heaps of statistics will tell you that bonds are less volatile than equity—and many investors equate that with safety.

While mathematically a lot of these claims are valid, and debt does have a prior claim to any company’s assets, and the government sure as hell does have the power to tax, equity, I would argue, is what investors should hold more of.

Equity is less risky than many imagine for one simple reason: they’re worrying about the wrong risk. At Money Forever, the risk we guard against is loss of purchasing power—not the short-term volatility that traders work with (and investors should ignore to stay sane), but the risk of losing capital and income.

This is why the recent Berkshire Annual Letter rang so true to me. Like other Buffett letters, it’s a free chance to hear from an industry titan and a great read for anyone interested in investing. This part caught my attention in particular:

During the 1964-2014 period, the S&P 500 rose from 84 to 2,059, which, with reinvested dividends, generated the overall return of 11,196% shown on page 2. Concurrently, the purchasing power of the dollar declined a staggering 87%. That decrease means that it now takes $1 to buy what could be bought for 13¢ in 1965 (as measured by the Consumer Price Index).

There is an important message for investors in that disparate performance between stocks and dollars. Think back to our 2011 annual report, in which we defined investing as “the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power – after taxes have been paid on nominal gains – in the future.”

The unconventional, but inescapable, conclusion to be drawn from the past fifty years is that it has been far safer to invest in a diversified collection of American businesses than to invest in securities – Treasuries, for example – whose values have been tied to American currency. That was also true in the preceding half-century, a period including the Great Depression and two world wars. Investors should heed this history. To one degree or another it is almost certain to be repeated during the next century.

Stock prices will always be far more volatile than cash-equivalent holdings. Over the long term, however, currency-denominated instruments are riskier investments – far riskier investments – than widely-diversified stock portfolios that are bought over time and that are owned in a manner invoking only token fees and commissions. That lesson has not customarily been taught in business schools, where volatility is almost universally used as a proxy for risk. Though this pedagogic assumption makes for easy teaching, it is dead wrong: Volatility is far from synonymous with risk. Popular formulas that equate the two terms lead students, investors and CEOs astray.

Losing income or purchasing power to inflation is unacceptable, especially for long-term investors.

As we learned last week, the Federal Reserve is in no rush to make interest rates less low—and a “hike,” a word the media uses far too often, is a gross overstatement of what we can expect. Less low rates, even if they come to pass this year or the next, will not make individual investors instantly rich. Treasury bonds, eagerly bought by investors from countries that aren’t doing great, don’t offer yields that would satisfy anyone who uses investment income to support their day-to-day life.

We’re left with stocks. And even though an ever-optimistic Wall Street gives away generous valuations, there are gems that belong in a sensible investor’s portfolio.

Safety is a holy grail for investors. Buffett’s reminder to pay attention to the aspect of safety that matters most—keeping your lifestyle intact—is something all investors should heed.