Supermodel Cindy Crawford likes stocks, so long as she can sleep at night.
Saxophonist Kenny G makes his own picks and checks them daily, while relying on an investment pro to stay out of trouble.
Gossip columns play up stars’ foibles, but most celebrities take a conservative approach to investing, knowing their income is unpredictable, said Todd Morgan of Bel Air Investment Advisors, who oversees $6.5 billion. About a fifth of that comes from people in the entertainment industry.
Crawford and Kenny G, with fortunes at least meeting the firm’s $20 million minimum, discussed their investment philosophies recently at Morgan’s Malibu weekend retreat, perched on a steep slope overlooking the Pacific. An ocean breeze cooled the sunny afternoon as sailboats crossed a view that included the cliffs of Malibu’s Point Dume headland.
The interview with the longtime friends was stippled with easy banter about family vacations and get-togethers. Sitting beneath an umbrella on Morgan’s deck, they were casually elegant, Crawford in a maroon blouse and jeans and Kenny G in a gray sports jacket, slacks and an open-collar white shirt.
Both acknowledged they’ve learned that fortune, like the fame that often brings it, is a perishable commodity.
Born Kenneth Gorelick, Kenny G, 57, has sold more than 70 million albums. An accounting degree is part of his investment arsenal.
“When money is coming in fast and furious, it’s easy to give someone X-amount to start a business,” he said, “because you think, ‘Oh, I’ll make that much next week.’ When it comes in a lot more slowly, you have to think about everything very, very hard.”
The list of wealthy stars who hit the financial skids stretches from Jackie Coogan in the early days of Hollywood to 1950s sweetheart Debbie Reynolds. More recently, Nicolas Cage lost his Bel-Air mansion to foreclosure after a buying spree that included British and German castles.
Those who come to Bel Air tend to be drawn by the firm’s reputation for wealth preservation, Morgan said.
“I’m not a big risk taker,” Crawford, 47, said. “It would hurt me more to lose on an investment than not to make money. They always tease me that I invest like an old lady. That’s where my comfort level is.”
The 2008 financial crisis pinched Kenny G, even though Bel Air had more of clients’ assets in bonds than stocks.
“All of a sudden Column A, which is my income potential, wasn’t making as much money,” he said. “At the same time the stock portfolio was going down. All that means you don’t spend as much. ‘I can’t buy a new car this year, honey. I just can’t.’ ”
The musician said he avoided pitfalls by relying on money managers with a record of transparency. He keeps aside some money for stocks he has followed for years, as well as real estate.