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Old 07-11-2009, 03:13 AM
jtc jtc is offline
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Default Guitars for investment?

Sorry if this is covered regularly, but I'm wondering whether guitars really represent sound investments, and if so, what sort of money I'd have to spend if I were to start to acquire some as an alternative to stocks & shares style investments. Basically the plan is to find a real-world return of around 8% per annum after allowing for inflation (~10% gross overall I reckon)

I've heard people say that vintage strats and such are well worth acquiring, but the 'cost of admission' is very high, so I wondered about more modest stuff, perhaps in the hundreds, rather than thousands, of pounds/dollars?

Also, how to start checking provenance of guitars, learning what's worth the money and what's not, etc.?

Just a little itch I'm curious about, rather than a solid plan, and where better to ask?

Thanks,

John
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Old 07-11-2009, 03:17 AM
Jeff M Jeff M is offline
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No, they do not.
Invest the money elsewhere...put it in a bank CD.
You'll do better.
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  #3  
Old 07-11-2009, 04:52 AM
HHP HHP is offline
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Guitars are speculation, not investment. Their future value is determined by the not necessarily logical demands of the buyers at that time. The actual intrinsic value of a guitar does not increase over time. Stock in a growing, well run companies does increase intrinsic value.
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Old 07-11-2009, 05:05 AM
Broadus Broadus is offline
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Any guitar will do better than my retirement fund over the past year or so!

Seriously, I would never buy guitars as an investment. It would be pure speculation. Real estate, especially buying now, would be a better investment, IMO.

Bill
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  #5  
Old 07-11-2009, 05:39 AM
andrewrg andrewrg is offline
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Speculation, absolutely! Who would have thought that a Gretsch White Penguin, which was a pretty average, blinged-up stock guitar only available as a custom order, would now be among the most sought-after of electric guitars by collectors?
Buy what you like, play it and enjoy it and if any value accrues in the future look at it as a bonus. I know this has been oft repeated but it bears saying again.
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Old 07-11-2009, 06:02 AM
Doubleneck Doubleneck is offline
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Interesting, seems I have a few stocks that blew up last year and somehow I still have my guitars. I would agree that guitars are not great investments, but there are worst places to put your money. They will tend to be a hedge against inflation. Actually making money involve finding what will be appreciated by a future buying public years from now. I am in my late 50's so the old Beatles era guitar have done well. But we will soon be dead and gone what will the younger people really want. Tends to be the heros they grew up with. Two examples I have 1967 J-45 bought for $232 in 1967 new, worth over $2,000 today probably tracked inflation. 1974 gibson les paul 1974 20th anniversary, bought used for $550 15 years ago, maybe $2500 today did good on that one. Cool thing is I can't enjoy and play my stock and bond portfolio.
Steve
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Old 07-11-2009, 06:28 AM
jtc jtc is offline
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"Cool thing is I can't enjoy and play my stock and bond portfolio."

Which is partly why I'm exploring this as an idea.
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Old 07-11-2009, 06:31 AM
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rmyAddison rmyAddison is offline
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I have a decent amount of money in high end Martins, think mid five figures, and I don't consider them investments at all. The ones I bought used are worth what I paid and will probably be worth more in 25 years, but I'll be dead and family will have inherited them.

True guitar investing is the pre-war stuff, mostly Martins and some Gibsons, and if I wanted to give that a shot I would think you would need at least $100K to get started, and that would only buy a few instruments. Plus you would be competing with people with very deep pockets and more importantly expert knowledge about pre-war guitars, they chew up and spit out novices like any of us would be.

We're fairly well invested, including some artwork, my guitars are not part of the "portfolio".

Old saying about many things but can be applied to guitars, "Want to make a million bucks investing in guitars.....start with two million!"
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Old 07-11-2009, 07:31 AM
Broadus Broadus is offline
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Quote:
Originally Posted by rmyAddison View Post
Old saying about many things but can be applied to guitars, "Want to make a million bucks investing in guitars.....start with two million!"
That's a great line.

Bill
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  #10  
Old 07-11-2009, 07:50 AM
gitardude gitardude is offline
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Guitars are a pretty risky investment right now. If you've got some spare cash sitting around, you might consider putting itinto the super-safe Gitardude Ponzi Fund, which is still returning a steady 8%.
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Old 07-11-2009, 07:59 AM
Sordello Sordello is offline
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Quote:
Originally Posted by jtc View Post
"Cool thing is I can't enjoy and play my stock and bond portfolio."

Which is partly why I'm exploring this as an idea.
If that is the reason, might I suggest collecting wine? (Much more exciting than stamps and coins, and you CAN enjoy the inventory that is 'under-performing' in the ROI ratios!!)

More seriously though, I should think keeping provenance info re. wine bottles would be much easier than tracking down guitar info and getting provenances about years, repairs, and original parts etc.

Prior post re. pre war guitars is spot on, especially when you consider the companies now are making a gazillion different models and styles, so you need a fortune to even get a representative sample of what is being made. Who knows which ones will rise in value?

Risks come from all directions - Larrivee is a case example: in the 70's JCL was a small shop, boutique maker. Top of the line guitars, very expensive and destined to be collector items. Then, he transformed into a factory, and began mass-producing. Then began making budget line models. Resale value dropped significantly. Market gets flooded with Larrivees. My 1978 L10 Deluce could have been worth $5,000 today if JCL had stayed small and been a peer of Baranik, Somogyi, Manzer etc. Now, I doubt I would get $2,000 for it, even though it has a tone that can stand shoulder to shoulder with any high end Martin, or Somogyi or Bashkin or Traugott... The market has a skewed belief: why buy an old '78 used Larrivee for $5000 when I can get a brand new one for $1000? (I know of a GORGEOUS-TONED '77 Larrivee L10 that was a honey! It had no bling but it still couldn't sell for $1000 since it had a few dings. Most luthiers would have killed for the tone out of that guitar!)

Then, sorry to get all morbid, but there is also the consideration that maybe you are the only guitar fan/expert in the family. If something should happen to you, what is your family to do with all these guitars requiring delicate care. Every attempt to sell one will involve many questions, details and provenance issues (disputes?), and your family may be only able to shrug their shoulders or waste the capital gains on professional experts to do this work. (Stocks and bonds are very easy for estates and executors to deal with). Wine can be useful for any Wake that is planned!
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Old 07-11-2009, 08:11 AM
rosewoodsteel rosewoodsteel is offline
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Put your money in the Stock Market!
(Oh...., er, nevermind.)
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  #13  
Old 07-11-2009, 08:34 AM
Tony Burns Tony Burns is offline
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unless you bought the guitar back in the 70's or 80's - guitars are not a good investment .Right now Id put it in a money Market . If you buy a guitar right ( like used ) it will hold its value for the most part as long as you take good care of it and dont beat it . IMHO
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Old 07-11-2009, 08:49 AM
gags gags is offline
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I bought a Gibson Les Paul zebrawood few months back guitar of the week 1 of 400 made.

Cost me £xxx imported in from the states but that was when 2$ was worth about 1 pound UK sterling.


I Have been offered £xxxx for it by many who have seen it in the UK thats around xxxx US Dollars in todays exchange rate.




Not a bad return in the short time I have owned it. (but I haven't sold it)

I bought it not to sell but I liked it.It looked cool to me.

in the pic:

Gibson SG Standard Natural Satin Single Coil ( 1 of 400) sold this for double what I paid in less than a month.

Gibson Les Paul Zebrawood (1 of 400) (Keeper)
American Fender Deluxe Amber stratocaster ( Keeper )
1998 (1958 American Collectors addition Telecsater) Keeper
Martin OM-18V Acoustic ( Keeper)

I never bought these guitars to sell but some guitars that I have owned have never connected with me so I have sold all for more money than what I ever paid.

Rumours abound that people have bought the 1998 collectors edition Telecaster and put them in glass boxes never to be played or played.

This is a crime: OK the guitar is a superb example built to a very high standard and its collectable,but thats not the point. The guitar sounds too good and plays too well for it not to be used.

Fender only made 1998 of these guitars but everyone who has one, does not have one, or ever seen one with a 4 digit serial. (the plot thickens) Its odd I have never seen anyone with one above serial 999

Guitars are nice to collect but its a sin not to play them.

Last edited by cotten; 07-11-2009 at 08:22 PM. Reason: AGF Rule 2 in FAQ: no guitar price discussion
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  #15  
Old 07-11-2009, 08:49 AM
TaylorKoaFan TaylorKoaFan is offline
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Generally speaking, no, guitars are not great investments.

However, guitars CAN be good investments. The difficulty is knowing which guitar will be a good investment years from now and which will not. Most guitars simply depreciate in value over the first few years of their life and then level off. If you buy used (at the point where their value has leveled off), and you buy smart, the possibility exists that you will have picked the right guitar that can gain some value over time.

A bit difficult to predict though.
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