Odlum Brown president and CEO Debra Hewson believes in buying things that you understand and that make sense.DARRYL DYCK
Debra Hewson grew up in a conservative household in North Vancouver where debt was considered a bad word and "boring" investments such as guaranteed income certificates and bonds were favoured.
The president and chief executive of Vancouver-based investment management firm Odlum Brown is a little more aggressive in her investing today, shunning fixed income entirely in her personal portfolio.
She also sees having too much cash as a "losing money proposition."
The Globe and Mail spoke recently with Ms. Hewson about her investing history and style.
What did you learn about investing growing up?
My parents were superconservative. We didn't talk a lot about investing at home. What they did teach me a lot about was being debt averse. There are certain kinds of debt you need to take on in life, like buying a house, but they felt that it was really important that you did what you could to get rid of debt. The key to being financially secure was to be debt-free. That was a big lesson for me. I've always hated having debt. When I've had debt, it has been a big priority to pay it down. My dad also taught me the power of interest. My dad gave me a bunch of Canada Savings Bonds (that's back when the interest rates were about 18 per cent) and gave me the coupon to clip. That was my first lesson on the power of interest.
What was the first investment you made?
The first investment – and at the time I didn't appreciate it was a depreciating one – was a car. I was 18 years old and I worked three jobs so I could have that car. It was a brand new, yellow Honda Civic. That was a lesson, too. Now that I had the car, I had to "invest" more money in it to keep it going.
What was your first stock investment?
I bought a junior mining stock for something like 10 cents and sold it for around 30 cents a few months later and then someone sent me a cheque. I thought, 'This is great. I have to figure this out.' I took the Canadian Securities Course and my interest in investing grew from there.
What's in your portfolio today?
My portfolio is primarily Canada and U.S. equities; large-cap, dividend-paying stocks, such as banks. This is Odlum's philosophy as well. I eat Odlum's cooking, so to speak. We believe in buying things that you understand and that make sense. When the inevitable bumps come you are less likely to panic if you understand what you own, and why you own it. Odlum and I also hold this view that we are looking more outside of Canada to the U.S. The dollar makes it a bit tough, but you have to look past that. I also try not to be a market timer. I don't really believe in that. You are better off buying something because you like it and you understand it. Now that I'm talking about it, I'm thinking, 'Geez, I'm just as boring of an investor as my dad was.'
I've owned my own homes, but I've never been a landlord. I've thought about it many times, but it seems like a headache I don't want to deal with. The work outweighs the cash flow for me.
What's the best investment you've made?
My investment in Odlum Brown. I am a shareholder. We are an employee-owned company. It's been a great investment for me financially, but also personally in terms of my career and what I've achieved. Another great investment I've made, and am still making, is in my kids' education. I sent them to private school at a time when it was a stretch for me to do so, but I believe in the power of education. I can't see how that can ever be a bad investment. Sometimes people forget about those things. I'm also a big believer in investing in the community. There's a big charitable component to my finances. I'm fortunate I can invest my time and some of my treasure to community organizations. That's important to me.
What's the worst move?
With the exception of that first penny mining stock, any time I've bought something on a 'hot tip' it has never worked out, mostly because I didn't understand or take the time to understand what I was buying. I'll admit there have been a few of them over the years.
For this series, a high net worth investor has investable assets of more than $750,000.