Investing in rare musical instruments is becoming increasingly attractive due to the growing wealth market's appreciation for the finite supply of fine violins and other instruments. This article delves into the nuances of this unique investment opportunity, providing detailed insights, statistics, and expert opinions.
In both booming and struggling economies, the investor class often debates the wisdom of owning fine, scarce objects. These objects range from fine art to rare coins, antique cars, stamps, first-edition books, and precious jewelry. However, fine musical instruments, particularly rare violins, cellos, violas, stringed basses, and harps, stand out as unique investment opportunities. Pianos also fall into this category, though their large size and associated moving costs can be a drawback.
The most valuable violins are those crafted by Italian master luthiers, Stradivari and Guarneri. As of 2023, the most expensive violin is the Messiah Stradivarius (1716), valued at approximately $20 million. Following closely are the Vieuxtemps Guarneri ($16 million), the Lady Blunt Strad ($15.9 million), the Carrodus Guarneri ($10 million), and the Ex-Kochanski Guarneri ($10 million) (source).
Interestingly, many of these instruments are held by anonymous owners and are often loaned to exceptionally talented musicians who cannot afford to purchase them despite their successful careers.
No reputable investment or auction house can legally predict the future value of a stock, fund, antique car, or fine violin. Investors in fine objects often look beyond monetary value to appreciate something more transcendent. According to Ric Heinl, a Toronto-based dealer, a $10,000 instrument today could double in value over 20 years, equating to a 3.6% annual increase. However, this doesn't hold for all instruments. A 2013 study by Brandeis University economists found that rare violins outperformed the S&P 500 Index from 2007 to 2012, suggesting these instruments may be counter-cyclical investments (source).
Investors can pool their funds to buy an instrument, though the legal arrangement would be their responsibility. Another option is to purchase a portion of an instrument from a middle-aged player who intends to continue playing it. The agreement would be to buy the remainder upon their retirement or death, providing liquidity to the player while allowing them to continue using the instrument.
The sale of these investments does not happen quickly. The global market, with an expanded base of wealthy collectors, particularly in Asia, means dealers sometimes travel extensively to show the instrument to prospective buyers. Even domestic sales can take months or years to execute.
Approximately 650 Stradivari instruments (violins, cellos, violas, harps, guitars) survive today, and catalogs list at least 148 Guarneris. Instruments made by Maggini, Amati, da Salo, Stainer, and others also remain highly valued. This scarcity drives the value of all instruments, as no more Stradivariuses will ever be made. Additionally, increasing wealth in parts of the world previously uninvolved in such investments boosts demand.
Reputable dealer and auction house commissions range from 5% to 20% of the sales price. Unless the investor is highly knowledgeable about the instrument, it makes sense to purchase through a dealer or auction house that can attest to the instrument's authenticity (maker, provenance, condition, etc.).
Investing in rare musical instruments offers a unique opportunity to own a piece of history while potentially achieving significant financial returns. However, it requires careful consideration of various factors, including market dynamics, liquidity, and transactional costs. As with any investment, due diligence and expert advice are crucial to making informed decisions.
By understanding the intricacies of this market, investors can make informed decisions and potentially reap the rewards of owning these timeless treasures.
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