The rise in the price of gold above $5,000 suggests that investors may fear a stock market crash. Silver also reached over $100 an ounce. I see a earnest “flight to safety” here as investors fear a decline in the value of more volatile assets.

Many people buying precious metals probably also sold government bonds. And this suggests a second loss of trust.

Inflation remains stubborn and U.S. job prospects remain tender in 2025. The Federal Reserve will also change its chairman this year. Markets are concerned about the possible economic impact of any drastic interest rate cuts that may result. The decline in the US dollar deepens confidence in cash investments.

Finally, no one could miss the artificial intelligence boom. Huge sums are spent on technology development. However, few companies have a clear plan to achieve sustainable profits. The potential could be huge. However, unless this can be quantified, stock price valuations are complex to justify objectively.

What to do?

So, a possible tech stock bubble, growing economic and governmental uncertainty, and the greatest flight to the safety of precious metals that most of us have probably ever seen. But will the stock market really crash? Nobody knows.

To turn a popular saying on its head, I believe that many investors don’t see trees for wood. The overall stock market situation may be looking a bit scary right now. However, I still find plenty of attractive valuations for individual stocks that are performing really well.

But if we do see a high probability of a stock market crash this year, what should we do? We might consider keeping as much cash as possible. And then exploit it to get your hands on depressed bargain stocks if they go down. You know, the exact opposite of what so many did during the 2020 crash, when they instead panicked and sold the company.

Stocks worth considering

Another option to weather uncertain times is to focus on relatively defensive stocks. And I think in the UK Tesco (LSE: TSCO) should be considered in this regard. Shares are up nearly 40% over the past five years, suggesting defensive investors are already on the hunt.

However, I don’t think it’s overvalued given the projected price-to-earnings (P/E) ratio of 15.5. This may be a bit more than I would expect in the long run, but not by much. However, I currently consider this to be a major risk. And as renewed optimism in stock markets drives investors back to riskier alternatives, we may see Tesco share prices weaken.

When it comes to dividend yield, Tesco isn’t the greatest, currently forecasting 3.4%. But this is consistent with FTSE100 average and should be well ahead of where long-term inflation is likely to be heading. This is not the dream of someone looking for passive income. But in my book it’s just okay.

Long-term value

Warren Buffett suggested that “If you don’t want to own a stock for ten years, don’t even think about owning it for ten minutes.” And that is my final suggested criterion for investors considering Tesco shares… or any stock.