Guitar Investments

[idealassets]

My point was that if you have money and are trying to make more money then buying guitars was still probably not the best way to make more money

Since I was about 8 years old what began as collecting baseball cards eventually included coins, stamps, currency, WWII artifacts, and other sports memorabilia.

The lesson I learned was that no matter what you collect, if you enjoy the hobby, you are on the right track. If we begin to think that we are a dealer, out to make money- it was described as "entering into the shark tank". If we put on the dealer hat we will soon be found out, and regarded as competition as opposed to being an "enthusiast".

It seems apparent that a wholesome approach in "guitar investment" is to study the players, the history, the instruments, and the values of the guitars & accessories. Then its interesting to study the "investment" collectors, such as Robbie Robertson, Jackson Browne, and Steven Stills.

I began to find out (Fretboard Journal, etc) that there was a goal, or direction to what they accumulated. In my case the early Martin 00 model, and Gibson harp guitars, old short scale guitars, etc, are out of the question for me to own.

I see from the signatures here on LTG there is somewhat of a collector inclincation with a lot of the players. I hope as well, that it was a good investment for your own personal growth, with the increase in value usually taking the back seat.

Craig

 

[fronobulax]

Don't hit me man! Not the face! Not the face!.........

You're fine, if only because I have to play bass this weekend and need my hands not to be bruised. Maybe "violently disagree" was a poor choice of words.

8)

 

[Scratch]

My point was that if you have money and are trying to make more money then buying guitars was still probably not the best way to make more money

Truth is; 9 times out of 10, its just a bad case of GAS... :roll:

 

[6L6]

I bought my first guitar (a new Candy Apple Red Fender Stratocaster) in 1963 for around $280. That was a lot of paper route/caddying/snow shoveling money back in the day! I sold it about 10 yrs ago for $16.5K. If i'd kept it another 4 or 5 yrs, I could have gotten over $50K for it.

But I'm not complaining!

Then, in 1991 I answered a local newspaper ad that just said, "electric guitar for sale." No other info other than a phone number. That lead to my purchasing an all-original 1953 Fender Telecaster w/original case for $300...

I played that Tele in our band up until around 2000 or so and then sold it on consignment. WAY too many people were giving it the look and I felt pretty sure it was going to be stolen. I was always watching the rear view mirror to see if I was being followed after a gig. And, if I can't play 'em, I don't own 'em.

That guitar netted me around $7K. It was later sold to "The Edge" in U2 and I presume he probably still has it. If I'd kept that one until 2007 or so, it would have brought $50K.

But I'm not complaining!

Other than those two deals I've always subscribed to the "Buy High, Sell Low" philosophy when dealing with guitars...

One of my other main hobbies has been buying/collecting old Lionel trains. Over the years I've done pretty well with them, especially the "Post War" ones made from 1946 thru 1958.

To me the bottom-line is to collect what you love, not just what someone tells you "you should be into". My gains from just two purchases in the guitar hobby have more than made up for all of my losses in the same.

Bill

 

[Ridgemont]

I disagree that musical instruments are wise investments. While I will admit that the guitar market is more stable than other forms of investments, the appreciation rate is slow, making a quick turnaround for profit a rarity. For arguments sake, an original Martin D45 could have cost a handful of dollars back in 1935 and now are being sold for $250-450K. That is a great investment if you are willing to hold onto it for 77 years. That is unrealistic and I do not think that is typical in the vintage instrument market. I believe the common occurrence would be for the "investor" to search the used section for a deal then eventually sell for an average price, resulting is a profit. Most guitars do not cost more than a few thousand dollars so this process would have to be done in high volume to turn a substantial profit. You are better off with wise real estate investments.


Now to veer a bit, like others have done, I view guitars as a very inexpensive hobby that requires a little bit of startup. The value of most musical instruments are relatively stable so most times you can sell the instrument for what you paid resulting in no loss. There are exceptions to this with new instruments often times being one of them. I have purchased 4 guilds in the past few years.

1. Purchased a GAD30 for $650 new with warranty. Sold for $650.
2. Purchased a '97 D25 for $600. Good condition, but found out later that it needed a reset. Sold for $425.
3. Purchased a '98 F30 via Treem's help for $550. Added an additional $75 for setup, bone saddle and pins. If I ever sell, I believe between $800-1000 is typical selling price for an F30 in its condition
4. Purchased a '99 D25 Burst for $400. Has a top crack and finish checking along with a bridge bulge. But the guitar was checked by a luthier and is very stable and has tons of saddle with low action. Now has a bone saddle and pins. So an asking price of $450 would be in order.

My experience has been that you win some and lose some. The profit on less expensive guitars is minimal at best making it difficult to call them wise investments. At the end of the day, you usually brake even.

 

[Brad Little]

have I been correct in telling people that a good guitar is a better investment than the stock market?

That is an attitude that I violently disagree with....Personally, I'd put my $10,000 in the stock market, not the Gibson/Martin/Fender market.

I remember a speculating friend of mine telling me (before the current downturn) that you could expect to double your money in five years in the stock market. As a non-speculator, I'd guess that it is still not too far off target. What say you , Frono?
Brad

 

[fronobulax]

You would need to earn 14.4% annually compounded interest for your money to double in 5 years.

I'm not quite sure how I could get 14.4% in any market at the moment :wink:

 

[Scratch]

Gold has far exceeded that over the last two years, but I'm not so sure it is a good investment at this point.

 

[Christopher Cozad]

If mother-of-pearl ever catches on as a currency, some of us could be rich overnight! :shock: :lol:

 

[West R Lee]

I think your best investment is to treat your wife like a prinecess and to raise your children properly. There is no better investment. :wink:

West

 

[killdeer43]

I think your best investment is to treat your wife like a prinecess and to raise your children properly. There is no better investment. :wink:

West

Well, I guess that just about wraps it up for the investment part of our program!

Holiday cheers,
Joe

 

[Ravon]

Before this post falls into the depths I want to clarify something about my previous post. I don't want folks to think I recommended purchasing a guitar for investment purposes (only if the investment is a musical investment. Nor do I want it to sound like I could really back it up with numbers and compare it to the stock market. Those are only responses I give to people who second guess an expensive guitar purchase. People say "My family (or friends) think I'm crazy to spend this on a guitar!" And the normal reply I give is either "For the money you spent on that guitar it won't buy you a clunker of a car , and nobody bats an eye at that" or "Think of it as an investment, I bet its better than the stock market". So there ya go!

 

[Scratch]

Before this post falls into the depths I want to clarify something about my previous post. I don't want folks to think I recommended purchasing a guitar for investment purposes (only if the investment is a musical investment. Nor do I want it to sound like I could really back it up with numbers and compare it to the stock market. Those are only responses I give to people who second guess an expensive guitar purchase. People say "My family (or friends) think I'm crazy to spend this on a guitar!" And the normal reply I give is either "For the money you spent on that guitar it won't buy you a clunker of a car , and nobody bats an eye at that" or "Think of it as an investment, I bet its better than the stock market". So there ya go!

 

[6L6]

The Holy Grail of acoustic guitars (at least in terms of value) seem to be the 91 Pre-War Martin D-45's. Of the 91 built, I believe 63 or so are accounted for so there's always that chance of a "barn find"!

A rough Pre War D-45 (owned by actor Richard Gere) sold recently at auction for over $200K, a good price. Nicer ones reportedly can fetch $300K, but only if you can find a seller.

It's been my incredibly good fortune to have played three different Pre War D-45's over the years. Two were at Mandolin Brothers in the late 80's and available at $150K, and the other was at Gruhn's store in Nashville. All were stellar examples of the mark in every single way.

It would have been around1982 or so when I played the one at Gruhn's. It had just been sold for $15K to some guy named Stephen Stills, but George offered it to me to play a few tunes. Thought I'd died and gone to Heaven...

Certainly Stephen has seen a very fine investment return on this purchase. However, there are MANY stocks and investments that have done far better over that period.

All that said, I really can't believe a Pre War D-45 is only worth $300K tops. These are the Stradivarius of all guitars. If a Stradivarius can routinely bring $5MM, why is a Pre war D-45 so cheap?

I think a closet full of Pre War Martin D-45's would make a very fine long term investment opportunity for my great grandchild to reap the returns of. There's just no way those guitars can't catch up with Strads some day. No way at all.

Bill

No Pre War Martin D-45's

 

[Willy]

I think your best investment is to treat your wife like a prinecess and to raise your children properly. There is no better investment. :wink:

West

Well, I guess that just about wraps it up for the investment part of our program!

Holiday cheers,
Joe

Relationships are of infinitely more value than anything we can own, yet I invest so much more in things.

Yes, holiday cheers...Merry Christmas!

 

[fronobulax]

If a Stradivarius can routinely bring $5MM, why is a Pre war D-45 so cheap?

About 250 years of increase in market value. Let's check that Martin in 2262...

 

[idealassets]

... Total known in existence, my Holy Grail (all Guild) are even more rare than the Martin pre war D45, but not valued as exhorbitantly.

Yup, clearly rarity is only one of many factors we've tried to enumerate in the grail formula. A Martin D-45 is not even close to a grail for me. I'm sure they're great, but I'm just not interested. I'd rather have the new Pete Seeger 12 than a pre-war D.

 

[chazmo]

Oh, shoot, Craig!! I accidentally edited your post rather than replying. I don't know how to revert that, but I'll try. Please feel free to re-edit your content back in.

SORRY!!!

 

[West R Lee]

Oh, shoot, Craig!! I accidentally edited your post rather than replying. I don't know how to revert that, but I'll try. Please feel free to re-edit your content back in.

SORRY!!!

Trigger happy! :lol:

West

 

[adorshki]

Trigger happy! :lol:
West

How Roy Rogers felt after a hard day at work.