Particularly in the past decade with the advent of sites like Reverb.com, buying a guitar as an investment or as a player’s guitar has become easier than ever. While a 1958 Gibson Les Paul burst top might be out of the price range for most at an average entry cost of $250,000, there are still plenty of solid gains to be made in the guitar market for the individual investor or investor/player in the coming years.
When the vintage guitar market consisted of loosely organized swap meets between dealers and individual collectors from all across the country—you really needed to be plugged into that close-knit world. Initially, the most collectable and profitable guitars came from the “Golden Age of Guitars”—the ‘20s to the mid 1960s—and there was, and still is, a degree of snobbery around it. For acoustics, this largely consisted of the pre-war era instruments such as a 1920s Martin 00 or 000 acoustics, and for electrics it was the pre-’65 Fender and Gibson guitars. Iconic rock ’n’ roll instruments that went for $8,000 in the mid-80s would eventually swell up to multiple six figures in value by the time the 00s came around—pricing out players of many classic instruments almost entirely and making these largely investor/collector-driven markets.
In the case of the golden age Les Paul Bursts specifically—the most expensive electric guitars in the world—it is estimated that over one-third-of-them are owned by billionaire investor/collector Dirk Ziff. While most of the larger profits that could be made off a ’62 pre-CBS Fender Stratocaster or a ’58-’60 Les Paul Burst have been made by investors like Ziff, these instruments are still likely to double or triple in value over the next two decades. If an instrument was owned, played or recorded on by an influential musician as well, the potential profit over time for one of these guitars can be much higher. Investors and collector-minded players by-and-large appreciate an instrument’s provenance. Private collectors and investors also want guitars that are all original and/or in pristine shape relative to its age—so that is important to keep in mind as well when investing in these “Golden Age” guitars.
While there has been a heavy focus on 70s USA Fender or Gibson for some collectors as the next big era ripe for the investment market, these guitars in particular are historically less revered in terms of their playability and have not exploded in value quite as expected. Even worse, at their current prices they are still typically out of the range of the average player’s market, and truthfully many of these guitars are just frankly poorly made instruments in the first place. As an investor or a player—unless you find a prime exception—these instruments are not usually worth the money people are asking for, and have not shown to retain their estimated value as well as their 50s and 60s counterparts.
One era that has seen 2-5x gains in the past five years, is 70s and 80s-era Japanese Fender guitars and copies of Fenders and Gibson, as well as international 80s companies such as Kramer and Ibanez. In this era, the quality of guitar production in America from landmark companies like Gibson and Fender had drastically declined, leading American players to opt for cheaper and frankly, better made copies from Japan by companies like Tokai and Fernandes. American companies truly couldn’t compete with the price or the quality of their Japanese counterparts, and for a period of time in the mid-late 70s American guitar companies were starting to be outsold domestically in the US by these international guitar companies.
Many of these Fender and Gibson copies were used and even endorsed by players like Stevie Ray Vaughan (Tokai) and Eddie Van Halen (Ibanez, Kramer), which have caused them to take on a life of their own in terms of popularity on the player’s and collector’s market. Eventually both Fender and Gibson would sue to stop the production of these “lawsuit guitar” models and inevitably incorporate Japanese manufacturing for their guitars at this time, while reestablishing new factories in America that could match the quality in Japan. As a shorter term alternative investment many of these guitars have doubled or tripled in value alone in the past five years, and will only grow in lore, popularity and value as the year’s go on making it a solid long-term investment as well.
Lastly, when collecting you by-and-large want to avoid newer Fender and Gibsons because they largely are lacking in both quality control and collectability. While there are exceptions in terms of rare finishes and limited edition models, there is significantly less collectibility and investment value for guitars made after the 00s, especially 2009 for USA guitars. The issue essentially is, while these guitars are likely to retain their value, they are not likely to be desired instruments that increase in value. Boutique and lesser known brands as well can be incredible player guitars and instruments themselves, but outside of the instrument having some sort of unique, defining provenance—they are likely not to retain or increase in value.
With all of this said, vintage guitars and musical instruments remain a highly desirable class of alternative investments. And for good reason—what other “investment” can you play AC/DC on?
