Is there a better hedge against inflation than vintage guitars? I'm thinking the right instruments might be better than gold.

Which begs the question; which instruments are the right instruments?

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In my opinion Leo Fender had essentially perfected the guitar amplifier by 1964.

Fat chance.

The only way that scenario works is if (as an example) you bought a '59 Les Paul in 1959 then sat on it for the intervening fifty-three years.

Gold is doing well, silver even better. Any serious profits in the vintage-instrument trade were made years ago, before the global economy tanked.

Arjay

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"Here's why reliability is job one: A great sounding amp that breaks down goes from being a favorite piece of gear to a useless piece of crap in less time than it takes to read this sentence." -- BRUCE ZINKY

It still amazes me how this idea of musical instruments as securities still persists...
This is how people should value instruments as investment vehicles..

......Durable Goods.....

When the horses have long left the corral, cashing in is just not possible.
$2,500 in an Index fund will be worth far more in 20 years than the average guitar.

Why...???....Simple... In an Index fund the securities are added or removed depending on performance. For that to work with guitars, one would have to constantly swap guitars according to the mood of investment values which may be correct or may be completely off....In any case the initial and constant expenditure would leverage any initial intent on return for investment to a negative return...

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"C'est parti mon Kiki "

A solid gold guitar, perhaps?

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Thank you!

Never buy guitars and othe collectibles as investment. You are almost certain to lose money. Buy these thing for enjoyment instead. Strange as it my sound that is how you will profit. I collect coins. everytime I buy for investment I lose money everything I buy cause I like them I've made a profit on. Bought gold in the '80's for 450-500 an ounce. Yeah golds 1500+ an ounce now but 2012 dollars aint worth as much as 80's money either.

This

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A better hedge might be the weight of the vintage guitar and case in hundred dollar bills.
I appreciate your love of guitars as I think sometimes my guitars are worth their weight in the precious metal too
Which instruments are the right ones? When I figure that out I will gladly share the answer with you Bro.

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you can save the world with your guitar one love song at a time it's just better, more fun, easier with a fender solid body electric guitar or electric bass guitar.

This is something I'd been thinking a lot about lately. While there may or may not be better investments, I think it's still quite possible to turn a nice profit if you play it right, and if it doesn't play out like you thought it would, you might just end up with a nice guitar you can cherish, and I think that's your safety net - being satisfied with having the guitar even if you can't turn a profit.

I'd imagine limited edition runs, or playing it safe with brands/models that have had a long-running history of standing the test of time in their desire to be owned by other players. For example, quality Strats, Teles, Les Pauls, etc. I think the real money can be made in finding guitars that haven't quite been realized yet as great guitars, and these are often buried within trends. Think Jaguars, Jazzmasters, Mustangs 25 years ago. If you think of what 80's guitarists valued in a guitar, it wasn't found in these three guitars. Dive bombs, hot licks, blazing solos, etc. Guitars geared around this were coveted, and that, obviously, translated into the cash value.

Traditional guitarists like traditional guitars, and traditional sounds. Guitars that deviate too far from the norm are often overlooked, and when they don't sell because of this, manufacturers stop making them, and then they're in demand because they're no longer made or because of a shake-up in guitar culture that makes the sleeping norm realize what they had overlooked (ie. Jags, JM, Mustangs). Or, another example based on "Its not made anymore" might be something like the Cyclone II.

I have a couple guitars in the Fender line-up I plan on snatching up in the near future, because I think they're great guitars that don't seem to be selling very well, and I suspect they won't be made much longer.

+1
that shipped sailed with the housing market. Not to say you couldn't get lucky and find a good deal and fip it for a few bucks, but I wouldn't go planning to retire of your profits.

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"Where would rock and roll be without feedback?"

I've made money selling classic cars that I've bought low and sold high but guitars are a losing proposition no matter how you slice it. Even if you have 50 or 60 years to wait while your initial investment accrues value it will never, ever give you the same kind of returns as a modest conservative mutual fund. As a matter of fact I often try to discourage folks from getting into guitar if I sense they are squeamish about spending or losing money. This guitar life we live ... it's a money pit.

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Just think of how awesome a guitar player you could have been by now if you had only spent the last 10 years practicing instead of obsessing over pickups and roasted maple necks.

I have bought a few guitars of late that I know I can make some money on if I decide to resell them - problem is, that $200 to $300 profit just isn't going to go far enough to make me want to sell the guitars. And truth be told, I have NEVER bought a guitar with the idea of turning it over.

I have a number of Japanese guitars that I bought used at ridiculously low prices back in the 70s, but I love them too much to sell them.

For me, guitars continue to be not much more than a loveable conundrum. My wife doesn't get it either.

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Dennis in CR
Rockin' since 1963

Thanks to all for the advice. I didn't mean to imply that I consider gold or guitars to be good investments.

Part of what motivates my question is remembering a visit to Gruhn Guitars back in the 80's. I didn't buy anything however, among his inventory I remember an original nocaster in very good condition for $1800 and a '50's White Falcon for $900. Those particular instruments might have outpaced gold in appreciation.

But lets say my stupid 23 year old self had bought something. I'm sure I would have gotten desperate for cash within the year and sold it at a loss.

I'm willing to bet there are instruments today that could possibly appreciate the same way. I think the early PRS's have doubled in the last 5 years and I'm stunned what folks are paying for 70's Fenders now. (some of that might be an "ebay bubble")

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In my opinion Leo Fender had essentially perfected the guitar amplifier by 1964.

Hi mhowell: your first post just asked whether vintage guitars could outpace inflation, rather than make a fortune. And I expect they could.

To be sure, most of their rise in value has already taken place over previous decades. Still, the vintage market is currently well off its top prices, which suggests it might climb again when (or if) the economy ever picks up. You surely ain't going to make multiples of the purchase price, but I bet a '59 Les Paul bought today will do better than inflation over the next five to ten years - and that's more than you can say for the average bank savings account these days.

On the other hand, I strongly suspect investing in metals (and not just gold) would yield better. And the smart money is into Asian industry and Asian property, so they say. I bet those will all do better than old guitars.

Cheers - C

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Well said..er...typed.

Agreed!

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Being able to play and enjoy music is a gift that's often taken for granted.

Don't leave home without it!

As has been pointed out, this is a very bad idea. NOW, that's not to say that real property isn't a "hedge", because it is. However, the reality is that a guitar is a luxury. It's not a durable, or a rare asset in terms of it's existence. Not a particular model, just a guitar in and of itself.

So, much like comic book, or baseball card collecting, they are very fair weather investments. The only way to get "in" on things like this is BEFORE they become collectible. Buying an overpriced vintage guitar and holding on to it for another 50 years will likely make it worth more in fiat currency.

HOWEVER, that's only IF the market persists. If at some point, and it MAY happen, the younger generations of players simply begin to value things like Fender CS guitars more then beaten only originals, then you're left with a HUGE loss.

Even if the collector market persists, it's a commodity that has such a tiny market in terms of the population, that it's a madman's gamble.

Things like Gold or other precious metals should only be bought when the worthless paper you are forced to use is high. That way when it is purposely devalued on a mass scale again either through market manipulation or the "printing" of more currency the value of your real assets increases. Now it will always fluctuate as that's the nature of fiat currency. Since it's value is not real, but prescribed. It's very malleable. Just not by those forced to use it.

Mark Twain said... "Buy land. It's the only thing they aren't making any more of."

Short of floating business locations that are being built off shore, or a real life Lex Luthor trying to "grow" a continent from alien crystals, I'd say it's pretty sound advice. Though, the empire can still strip that from you via their court system.


Soooo...yeah... Good luck.

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