Are Vintage Guitars a good Investment?
I'm often asked this question by serious collectors, and many times by the wives of these collectors. Years ago Vintage Guitar Magazine started tracking a specific inventory of highly collectible guitars, and every issue (once a year) for the past few years aims to graph the greater market. Like housing, the vintage guitar market seemed to reach a peak in 2007, and then by the time the greater economy crashed and burned, the vintage guitar market went south on the same road. It has been postulated that the housing bubble enabled everyone to take out a second mortgage, or refi the house for extra cash, and like Rolex watches and boats, vintage guitars were acquired with the money. I think this is possibly true to some small extent, but there is a lot more to the story.
Americans have been fundamentally challenged as never before since the banksters declared themselves essential, irreplaceable, and entitled to the treasury. An absence of confidence leads to a strict concern for life's necessities, and guitars are strictly a luxury purchase. There were a (relatively) lot of people willing to buy $25,000 stratocasters in 2007, and very few that would part with that amount of money a year later. The dealers who had invested in expensive inventory were forced to hold on, and the individuals who needed to cash in were forced to sell at liquidation prices. By 2010-11 things had stabilized at a very low price point, and the drop started to level off. The recovery in guitars again paralleled the recovery of the housing market, and here we are in 2015 thinking about purchasing boats, houses, and guitars for approximately the same money that they cost in 2004-5. Now the 1% could care less about "investments" since they simply don't need the money (darlin'). I live across the Intracoastal waterway from Palm Beach, and both the old money and new have returned to conspicuous consumption with a vengeance not seen since 2007. I think we can all agree that seven years later, the economy is moving forward. Value is still hard to come by, and with decent Japanese guitars costing in excess of $4.000, American vintage guitars are still under priced.
I think there is a great upside to investing now, and I have been taking my own advice for the last year. The best examples are still out there, and as long as you are willing to pay more than a dealer, you are in a good position to profit from a market that still has strong demand. The market is international, and there are a surprising number of collectors in Europe that are selling and buying every day. Buy what you love, spend neither too much or too little, and ENJOY playing and owning the best instruments ever made. If you would like to discuss using vintage guitars as a repository of value, and building a collection that you would enjoy every day, please contact us.