VOOV

When analysts raise their earnings estimates, shares of some of the hardest-hit companies will begin to bounce back.

S&P 500 earnings data (courtesy of IBES data by Refinitiv) continues to show positive sequential increases in weekly S&P 500 earnings estimates for various time frames.The correction being seen in the US equity market - at least so far anyway - isn't supported by a degradation in either the forward 4-quarter S&P 500 EPS estimate or the various time frames covered by the S&P 500's "forward earnings curve".Despite the sharp drop in the large-cap Tech stocks, the Tech sector estimates haven't changed that much.

In this part three of my "value investing binge", I face off the SPDR Portfolio S&P 500 Value ETF against Vanguard's VTV.When it comes to factors like size, liquidity, diversification and cost, SPYV and VTV are very comparable.Regarding value ETFs, I am largely indifferent between SPYV and VTV, and award a bronze medal in this three-player race to VOOV.

VOOV is an excellent way to diversify away from potentially overvalued U.S. Consumer Discretionary and Tech stocks.Though VOO has more AUM, its sector allocations are far more reasonable for investors looking to reduce portfolio risk.My analysis of U.S. stocks show a clear negative correlation between trailing and forward six-month returns during periods of high volatility among sectors.As the next wave of volatility approaches, switching from VOO to VOOV can protect large year-to-date gains while still maintaining broad market exposure in a low-cost ETF.

Vanguard S&P 500 Value ETF (VOOV) - $0.6344.30-Day SEC Yield of 2.64% as of Aug. 31.Payable Sep 16; for shareholders of record Sep 14; ex-div Sep 11.

Over the last several weeks, the S&P 500 has been on a tear, setting records on an almost daily basis despite lacking breadth, with the biggest rises in stock prices concentrated in the technology sector.Until last week, when what we've described as a bubble in stock prices appears to suddenly pop after spiking up to hit an all-time high.Remarkably, the S&P 500 waited to exit the redzone forecast range we've been focused upon for the last six weeks in the alternative futures chart.

The S&P 500 and equity markets have underpriced the major paradigm shift in The Federal Reserve’s thinking.Unlike the traditional thinking on “real returns”, empirical research shows that stock performance correlates positively with higher inflation.Further gains are expected in equity markets (also an inflation hedge), low risk bonds would relatively underperform.Stock allocations need to move towards cyclicals/capital gains and less towards defensives/dividends.

There is considerable capital likely to be deployed into equities as investor pessimism eases into optimism.Other than the FAANG issues, there are many equity opportunities yet available.Buy stocks of well-managed companies with active insider buying.