Geopolitical and Economic Landscape - The last year was characterized by tariff fears, geopolitical tensions, and AI bubble concerns, with expectations for continued volatility this year [1] - Recent U.S. military operations in Venezuela and tensions in the Middle East and Asia have heightened risk aversion, with President Trump considering military action over Greenland due to increased Russian and Chinese activity in the Arctic [2] - A tech-driven inflation surge is identified as a potential overlooked threat to the market for 2026, which could dampen investor sentiment [3] Investment Strategies - Amid potential near-term volatility, investors are likely to adopt more risk-averse strategies, such as value investing, especially in light of possible economic downturns [4] - Value investing focuses on purchasing undervalued stocks based on fundamental analysis, aiming to profit from market inefficiencies [5] - By holding undervalued stocks long-term, value investors expect the market to recognize their true value, potentially yielding significant rewards with lower volatility compared to growth stocks [6] Value Investing Appeal - With rising geopolitical tensions and lingering AI bubble fears, value investing is emerging as an attractive strategy for investor portfolios [7] - From January 2 to January 6, the S&P 500 Value Index gained approximately 2%, outperforming the S&P 500 Growth Index, which rose about 0.98%, indicating renewed momentum in value stocks [8] - Value stocks are often perceived as less risky due to their stability and reduced volatility, making them appealing for risk-managed equity investing [9] Value ETFs - Value investing requires discipline and patience, and using ETFs can simplify the implementation of this strategy for investors [10] - Persistent geopolitical and economic risks are enhancing the case for value investing, with value ETFs offering diversification, lower volatility, and easier access to undervalued stocks [11] - Value ETFs focus on stocks with strong fundamentals that trade below their intrinsic value, providing potential for higher, stable returns and lower volatility compared to growth stocks [12] Benefits of Value Investing - Value funds can cushion against market volatility and serve as a source of income through dividends, making them suitable for medium to long-term investors [13] - Adopting a value investing approach also provides diversification benefits for investors looking to safeguard their portfolios [13] Recommended Value ETFs - Investors may consider various value ETFs, including Vanguard Value ETF (VTV), JPMorgan Active Value ETF (JAVA), Avantis U.S. Large Cap Value ETF (AVLV), iShares Russell Mid-Cap Value ETF (IWS), and Vanguard Small Cap Value ETF (VBR) [14]