Stocks are volatile investments, as if anyone needed reminding after the wild ride of the past few weeks. Still, May 6, the day the machines took over and drove the stock market down 1,000 points in a mere 16 minutes only to largely reverse course by the end of trading, emphasized just how volatile stocks are in an age of ever-more-powerful computers, increasingly complex algorithms and financial gunslingers controlling trillions.

It's a safe forecast that even after regulatory and industry adjustments are made something similar will happen again, although by definition the timing is unpredictable.

On one level, the breathtaking ride simply emphasizes an old truism: Don't put any money in stocks that you might need anytime soon. A sensible rule of thumb is that you don't need to tap funds in the stock market for at least five years.

But a bigger question is whether the stock market is too risky for the average individual? A listener asked me that question recently. Risk is not the same as volatility, although there is a close relationship between the two. Risk is really not having the money you need to pay your mortgage, to send your children to college, to live as well in your 80s as you did in your 50s.

"Risk in many ways is the probability of not reaching the things that you want to reach, not meeting your goals," Ross Levin, a certified financial planner and head of Accredited Investors Inc., once told me.

He's right. That's why equities can have a place in the retirement savings plan of most people, as long as the uncertain returns that come with owning equities are well-understood.

Now, I am not a huge fan of defined-contribution retirement savings plans like 401(k)s. I don't think it's realistic to expect non-Wall Streeters to make the difficult asset allocation and other investment decisions in a reasonably rational and informed way that this kind of retirement product demands. Most people are already spending a lot of time and energy at work, with their family and friends. On top of all that we're supposed to be knowledgeable about the main tenets of modern portfolio theory?

That said, the 401(k) is the retirement system we have and it isn't going to change, at least not anytime soon. So, the only way to get a higher return in the market is with 1) luck or 2) from bearing risk. Luck doesn't last and bearing risk is, well, risky. Investing in stocks creates the opportunity to earn a higher return than on bonds. The reason is that stocks represent the uncertain returns to entrepreneurship while bonds are contracts that spell out when borrowers must make principal and interest payments.

The risk of owning stocks also means that market downturns aren't simply short-run price fluctuations. If that were true, everyone would make a ton of money buying on dips. No, there have been many 10- and 20-year periods during which stocks underperformed bonds.

However, the notion of getting out of equities simply because they're volatile is wrong. Equities offer the chance of growth. The real reason to steer clear of equities is if you don't understand the risks or you can't take the risk.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org.