When U.S. President Donald Trump was elected, many investors were optimistic about the prospects of their investments. However, money manager Richard Croft, president, chief investment officer, and portfolio manager at Croft Financial Group in Toronto, took a more defensive approach.
“I thought he would add more volatility, which turned out to be an understatement,” says Mr. Croft, when reflecting on the impact of President Trump’s election on the markets.
As the President’s tariff threats gained momentum earlier this year, Mr. Croft increased his cash position and shifted his investments into sectors that were less affected by tariffs, such as Warren Buffett’s Berkshire Hathaway Inc. and sectors like gold and pipelines.
- Cash allocation: 19% of the portfolio
- Fixed income allocation: 10% of the portfolio
- Equities allocation: 71% of the portfolio
These changes have contributed to a 7.7% return over the past 12 months for the growth portfolio, with a three-year annualized return of 3.7% and a five-year annualized return of 7.9%.
- Fixed income allocation: 15% of the portfolio
- Cash allocation: 22% of the portfolio
For the balanced portfolio, Mr. Croft has seen a 8.5% return over the past 12 months, with a three-year annualized return of 3.9% and a five-year annualized return of 8.1%.
A key factor in Mr. Croft’s decision-making process is his ability to assess the potential impact of the President’s policies on the markets. He acknowledges that predicting the President’s next move is like trying to predict the actions of a skilled hockey player, such as Wayne Gretzky.
Growth Portfolio: BRK-B-N, ENB-T, AEM-T
Stocks in the growth portfolio Company Price per Share Why Berkshire Hathaway Inc. (BRK-B-N) US$458.19 Stable and strong dividend, low volatility Enbridge Inc. (ENB-T) $58.48 High dividend yield, stable pipeline business Agnico Eagle Mines Ltd. (AEM-T) $151.59 Strong gold mining company, good margins Amazon.com Inc. (AMZN-Q) was another stock that Mr. Croft sold recently, as he believed it was a primary target for tariffs. However, he notes that he has been in and out of the stock over the years and may return to it in the future.
“I love the company; I think it’s at a very tumultuous point right now, so I took the profits,” says Mr. Croft, referring to his decision to sell Amazon.com Inc. (AMZN-Q) in February. “We’ll see how it plays out. I may go back into it. I’ve been in and out of the stock for years. It’s my favourite among the Magnificent Seven.”
Mr.
