Is there going to be a stock market crash soon? The chances must surely have increased, after Bank of England deputy governor Sarah Breeden spoke last week.

“There’s a lot of risk out there and yet asset prices are at all-time highs. We expect there will be an adjustment at some point“, she said. And by the usual reserved standards of the BoE, those are strong words indeed!

I can certainly understand why a lot of private investors might be feeling a bit scared after that. Some might think I’m weird, but I’d welcome a summer of share price falls, and I’ll explain why. But first, I’ll just park an Aviva (LSE: AV.) share price chart here — and I’ll come back to it shortly…

Cheap beer, anyone?

Suppose a trade brewing organisation announced: “Beer prices are too high right now, but we expect they’ll come down.” I doubt too many people would be unhappy about that — except maybe beer sellers. And if I was selling my shares now and I intended to continue, I’d want the stock market to stay high.

But I’m still a net buyer of shares. And I have no plans to sell anything any time soon. And that’s where Aviva comes in. I bought Aviva shares some time ago, and they’ve come good for me. The trouble is, I like the way CEO Amanda Blanc has reshaped the company in a major turnaround… and I’d be happy to own some more of it.

But we’re looking at a forward price-to-earnings (P/E) ratio of over 12 now. And for a business in a cyclical sector, facing risk from economic pressures, I don’t think that’s a particularly cheap valuation. It might be fair value, considering the 6.25% forecast dividend yield. But it’s certainly not a no-brainer buy… and I could see short-term share price weakness.

A 20% fall?

But what if FTSE 100 shares should all fall 20%? That’s the technical definition of a stock market crash. It would drop the Aviva P/E to under 10. And the potential dividend yield would jump to 7.5%. Now wouldn’t that make Aviva look like a better buying proposition? It sure would to me.

And with dividends, there’s an extra benefit. If I can buy at a price that gives me a 20% better yield, the 20% improvement is locked in for that purchase… for as long as I hold those shares.

Of course, if Aviva shares suddenly look 20% better value, so would everything else. But as a share buyer, that’s a problem I wouldn’t complain about having.

Long term

Now, this all only really applies for investors still looking to buy and hold for the long term. Those who are selling down, for example to fund their retirement, might have a tougher time — at least until markets pick up again, which could take a few years if we’re unlucky.

And though I might prefer other picks at the moment, I do think the dividend yield means Aviva is worth considering for long-term income investors — even though dividends aren’t guaranteed.