Guitars as True Investments

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Zaphod B

Zaphod B

Raccoons-Be-Gone, Inc.
Is there any future in it, I wonder?

When I look at the current prices of guitars that were pedestrian, standard production guitars back in the late '50s and early '60's, I know that there have to be some guitars being manufactured today that will appreciate, if for no other reason than attrition.

Let's say I had some money to play with. Which of today's guitars are tomorrow's gold mines? The 2007 chambered LP Standards? Run-of-the-mill American-made Strats and Teles? Or perhaps some of the more upscale models - PRS 10-tops, boutique guitars?

Whaddaya think? :confused:
 
Obviously I know the answer to that, but if I told.....








































I'd have to kill you :D:D
 
It's kind of like the collector car conundrum.

You could buy a car that's a limited edition, for example a 2007 Ford Mustang Shelby GT500 convertible, and put it in environmentally controlled storage and never drive it or even remove the plastic from the interior surfaces, and in 30 years you could likely get 50 times its purchase value. But all that time you have to pay to maintain it in that environment, and your profit spread out over all those years isn't all that much.

Still, there is profit to be made if you live long enough. :D

With cars there are some pretty safe bets - convertible muscle cars that survive the years intact always bring good return.

Which guitars, though?
 
In truth if you want to try and predict what guitars are going to increase in value your gonna be hard pushed. The better way to look at it is to start from a point of view of which guitar is likely to hold its value. From that anything over and above is gravy. There really is no way to predict trends for the future. A lot of the so called investment guitars of yester year have had false values put on them by collectors/traders. A gullible public allows them to get away with it.

If I really wanted to know for investment purposes, which I don't there are safer places for my money, I'd look to find out what the large well known independent single outlet shops are selling and buying. There finger is nearly always on the pulse.
 
If the past is any indication, then it would be medium- to medium-high spec guitars from major manufacturers, made in America. That way the entry price is not too high, there are enough made for them to acquire some history and desirability over time, and not so expensive that they need to appreciate like crazy to at least hold their value considering inflation.

Like you, I think there are better ways to invest.
 
Some of that investment value is quite whimsical. A hot band or player can drive up the price of certain instruments for a while, but then when their popularity begins to fade, prices may deflate -- for example the Gretsch 6120 shot up in price when the Stray Cats were a hot group. As rockabilly and the Cats faded, the price on 6120s dropped as well. Vintage ukes shot up in price, at least in part, due to George Harrison publicly playing them. Prices for some models have since settled back down. Then there is the question of what happens when the baby boomers with lots of disposable income and who have boght many of the vintage instruments get older and then unload their collections/investments? Will there be a glut on the market, and falling prices, as lots of boomer instruments hit the market at about the same time?

I think buying an instrument for its collectible value is fine -- its a crap shoot however. While I do buy instruments that typically have some current collectible value, I only buy instruments that I can play and that actually do sound good. At least for me, playing a good instrument comes first. Future value is certainly a consideration, but not that much of one. In any event, a nice guitar is a lot more entertaining than a zero coupon bond. :D
 
The reason old Strats, Teles, and LPs can command so much money is that they were being played during the seminal days of rock and roll and are still being used today by rock and rollers. In fact, they have become the benchmarks against which many, many other guitars are judged. (Not necessarily the best, nor the worst, but they set the bar as no other electric guitars do.) So there is a direct link to the past.

I wonder if those models will have that staying power after another 40 years?
 
I guess it will be up to my kids to see what my guitars are worth. I've learned my lesson about selling guitars. I always regret it eventually. :o
 
I bought a 1963 Gretsch Chet Atkins Country Gentleman, all original with case, in 1982 for $425. In the '90s it was worth around $5K. By the time I sold it the value had dropped to $3K (I still made a profit).

Why? I think it's because the guys who collect guitars are after something from their youth, that they couldn't afford then. By the time I sold the Country Gent, everybody who wanted one pretty much had one, and the younger guys weren't interested. They were looking for something from THEIR past.

A friend has a restored '57 Chevrolet Bel Air convertible. At one time it was worth around $90K. Now it's maybe half that.

Why? The guys that wanted one either have one, or they are dead. It's a fact of life.

In other words, what's hot now, won't be hot in the future, except to hardcore collectors, and it'll be a buyer's market -- just as it was in 1982, when it was difficult to GIVE a Chet Atkins away.

Trying to hit the jackpot by outsmarting the market means you've got to be prepared to invest in a lot of stuff that'll never be worth what you paid for it.

So maybe you ought to buy superstrats from the '80s for all the kids who will be making big bucks in 2030.

Or, just maybe, you should do what I did, and buy a guitar you like, play it for a long time, and then pass it on to the next guy. Hopefully you won't lose money.
 
For what it's worth,

Guitars outperform the stock market and have done so for quite some time. Overall they have been a good long term investment since the early seventies.

People including vintage guitar dealers have been saying the bubble was going to burst for most of that time. It will probably happen, but when it does the instruments you have invested in will still have grown in value.

LPDeluxe hit the nail on the head when he talked about people buying what they lusted after when they were young.

The only strategy that makes any sense to me is to buy what appeals to you. If it appeals to you there's a kid out there who wishes he had one too. In the meantime you got to play it.

I would point out that '70s vintage Gibsons and Fenders command high prices and the '70s were not banner years for either company.

I'm thinking that special Ibanez and Eastwood instruments have potential. Europeans and Asians are having a greater effect on the market than they used to and they are less loyal to American products than in the past.

You might also look to American companies like Rickenbacker that have lower production numbers. Steer clear of models that were designed to be collectors guitars.

2 cents
 
I should probably be buying warehouses full of Dean Warlocks for all the 12-year-old death metal kids, for when they turn 35. :D
 
More good points, Milnoque.

It affirms my own contention that it's quite a crapshoot. I wouldn't be surprised if there aren't quite a few people out there who are stockpiling what they think will be big 20-30 years from now.

But I'll also bet that the ones making the money off the 1940 Martin D28s and the rest right now, made it the old-fashioned way by seeking out sellers who didn't know what they were worth, or by trading with collectors for something they wanted. That strategy has the advantage that you don't have to predict the future, you just have to out-deal the competition.

But the idea of buying THE GUITAR now for profit later is a lot riskier. To spread the risk, you've got to put out some capital so the hits pay for the misses.

As far as a bubble: well, who knows, after all. Look at the current housing market, which is based on a commodity a hell of a lot more people want than some old guitar.

Nonetheless, I'm hoping my Les Paul Deluxe (from the Norlin days, NOT a collectible among the knowledgeable, even though it sounds and plays killer) makes a buck for my kids down the road.

Meanwhile, I bought it to play, so I'll play it.
 
lpdeluxe said:
Nonetheless, I'm hoping my Les Paul Deluxe (from the Norlin days, NOT a collectible among the knowledgeable, even though it sounds and plays killer) makes a buck for my kids down the road.

Meanwhile, I bought it to play, so I'll play it.
Click to expand...
Tell me about your LP Deluxe. I have a Norlin-era 197?? LP Deluxe (I think that's what they called it) that is a reissue of a LP Special - Solid mahogany body, flat and uncarved, unbound body, bound neck, originally with two P-90s, with two volume and tone controls. I replaced the bridge P-90 with a DiMarzio SD years ago.

Anyhow, is that what yours is like, or is it more like a standard LP?
 
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