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Streisand told Fortune magazine she started online share trading early last year, after a doctor friend told her about the impotence drug, Viagra. She bought Pfizer stock at $89 and became hooked when the price quickly shot up to $120.
When she told her close friend, Donna Karan, she had made $130,000 (about £83,000) in one month's trading after buying shares in the online auctioneer eBay, the fashion designer gave her $1m to invest.
Streisand says she had reservations but told her: "I'll do it if you're willing to lose it".
At first, it looked as if Karan would indeed lose out. Streisand says, "The first day, I bought eBay and Amazon and they dropped 20 points each at least. I couldn't even call her ... I was having heart palpitations."
Huge profits on a $1m stake
At the end of five months of intensive trading, Streisand had made $800,000 profit on the $1m stake.
The two millionaires spent the windfall on luxury cruises, but Streisand has since stopped placing investments for Karan, saying the risk was putting too much strain on their friendship.
Share trading has nevertheless become a consuming hobby for the star of Funny Girl, The Way We Were and Yentl. She has installed a real-time stock quoting service at her home in Malibu, and says she wakes up early every morning in time to catch the opening of the East Coast markets.
Streisand's winner's instinct
She says she gets her investment ideas from talking to friends and relations, and from daily life. "We go to Starbucks coffee-houses every day so I bought Starbucks stock," she says.
Last summer, while cruising off the coast of Greece, she was discussing America Online with her husband when she decided to phone her broker immediately with a "buy" order.
In the following months, the stock quadrupled in value.
More recently, some of Streisand's favourite stocks have nose-dived. America Online has fallen more than 20% in less than a month, while Amazon has halved in value since April.
For all her success with her own trading, Streisand says the volatility of the markets makes her nervous: "I can't stand to see red in my profit-or-loss column. I'm Taurus the bull, so I react to red. If I see it, I sell my stocks quickly."
Risk no more than you can afford to lose
The bulk of her enormous wealth is handled by Todd Morgan, chairman of Bel Air Investment Advisers, whose investments on her behalf are very conservative. The former Goldman Sachs partner says, "Our clients are already rich. Our goal is not to make them rich, but to keep them rich."
He says he likes to invest mainly in blue-chip equities, and that his show business clients tend to be especially cautious: "After all, they could earn $20m for one movie, then have no idea where the next million is coming from."
Online trading alert
(05 May 99 | Your Money)
Amazon loss widens
(28 Apr 99 | The Company File)
Fortune magazine report
How Streisand stays rich
Barbra Streisand
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