August was an unusual month. We had escalating nuclear tensions with North Korea, and a storm – Hurricane Harvey – that will likely go down in history as the costliest natural disaster in U.S. history once the damages are tallied.

Yet perhaps shockingly, the stock market remained surprisingly quiet. Volatility ticked up modestly from its summer doldrums, but the S&P 500 managed to finish the month flat, up 0.1%.

The Dividend Growth portfolio finished the month down slightly, giving up 0.28% after fees and expenses. Year to date, the Dividend Growth portfolio was up 6.7% compared to 10.4% for the S&P 500 [Note: All returns data calculated by Dividend Growth as of 8/31/2017; past performance no guarantee of future results].

I made several portfolio moves in August to better position the portfolio for the remainder of 2017.

To start, I took partial profits in oil and gas tanker operator Teekay Corporation (TK). Teekay’s stock price has been volatile in 2017 (along with energy prices), and I have been adding to the position when it reaches the lower end of its wide trading range and taking partial profits when it reaches the upper end of that range. While I expect Teekay to go much higher from current levels, I also intend to continue opportunistically trading the shares as conditions allow.

Following the announcement of a major dividend hike, I added shares of Citigroup (C) in August. The financial sector stands to benefit from several very favorable trends in the coming years. To start, while I don’t expect the Federal Reserve to be particularly aggressive in raising short-term interest rates, I do expect rates to go at least modestly higher. All else equal, higher interest rates and stronger economic growth mean higher profits for banks.

But beyond this, the large banks are one of the few true remaining pockets of value in a market that seems to get more expensive by the day. Citi trades for just 90% of book value and at a modest 11 times expected 2017 earnings.

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