Why this $1.1-billion money manager is selling Amazon and adding gold and cash

While some investors were bullish when U.S. President Donald Trump was elected last year, money manager Richard Croft started getting more defensive.

“I thought he would add more volatility, which turned out to be an understatement,” says Mr. Croft, president, chief investment officer and portfolio manager at Croft Financial Group in Toronto, whose firm oversees about $1.1-billion in assets.

When Mr. Trump’s tariff threats gained momentum earlier this year, Mr. Croft got even more cautious with his investments.

“Trying to predict Trump’s next move is like trying to predict what Wayne Gretzky’s next move would’ve been [when he played hockey],” Mr. Croft says.

“Did I think it would be as uncertain as it is? No, but I felt I would rather have a more defensive position as we went further into this year.”

Mr. Croft started to increase his cash position and move his money into businesses that were less affected by tariffs, such as Warren Buffett’s Berkshire Hathaway Inc., and into sectors such as gold and pipelines.

Mr. Croft’s growth portfolio – which includes about 71 per cent equities, 10 per cent fixed income and 19 per cent cash – has returned 7.7 per cent over the past 12 months. Its three-year annualized return is 3.7 per cent and its five-year annualized return is 7.9 per cent. The performance is based on total returns, net of fees, as of April 11. (The cash allocation was 3 per cent before Mr. Trump was re-elected last fall).

His balanced portfolio – which includes about 63 per cent equities, 15 per cent fixed income and 22 per cent cash – has returned 8.5 per cent over the past 12 months. Its three-year annualized return is 3.9 per cent and its five-year annualized return is 8.1 per cent. The performance is based on total returns, net of fees, as of April 11. (Cash was 5 per cent before Mr. Trump was re-elected).

The Globe spoke with Mr. Croft recently about what he’s been buying and selling:

Name three stocks you own today and why.

Berkshire Hathaway Inc. BRK-B-N is a stock I bought last year and added more of in recent months. Our average price is US$458.19 a share. I own it in U.S.-dollar pooled accounts.

At the end of last year, I felt there would be a lot of turmoil when Trump got elected. I also felt we had two solid years in the market, and it was unlikely that would be repeated, so I sold out of SPDR S&P 500 ETF Trust SPY-T to buy Berkshire Hathaway. I thought the cash position Warren Buffett had amassed in Berkshire was for a good reason.

Enbridge Inc. ENB-T, the Calgary-based pipeline company, is a stock I started buying over the past couple of months at an average cost of $58.48 a share.

I like Enbridge because it has a very high and stable dividend, currently yielding 7 per cent, and I didn’t think it would be as impacted by tariffs as many other companies. I also think that if Canada gets its act together and builds more pipelines, it will be good for companies like Enbridge. I don’t think it’s a growth business, but in this environment, it’s nice to have stable, dividend-paying companies in the portfolio.

Agnico Eagle Mines Ltd. AEM-T, the Canadian gold miner, is a stock I’ve been buying over the past few months at an average cost of $151.59 a share. I also bought SPDR Gold Shares ETF GLD-A for an average cost of US$268.17 a share. It’s an exchange-traded fund that holds gold bullion. I wanted to own both a gold miner and physical gold.

I’ve never been a big fan of gold in normal circumstances, but these aren’t normal circumstances. I think Agnico is a strong Canadian gold mining company with good margins. Also, occasionally, we write options on these securities, and Agnico has a good, liquid options market, which enables me to make changes or manage volatility. The same goes for SPDR Gold Shares ETF.

Name a stock you sold recently.

Amazon.com Inc. AMZN-Q is a stock I owned for about a year. I bought it at an average of US$176 a share and sold it at US$208.70 in February. As the tariffs started heating up, it looked like the primary target was China, and many of Amazon’s products flow through there.

I love the company; I think it’s at a very tumultuous point right now, so I took the profits. 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.

This interview has been edited and condensed.