Investment In Violins
Do Violins Make Good Investments?
The short answer is yes, absolutely. According to the British newspaper, the Telegraph, when it comes to a safe haven for your money, little can beat a rare old violin. While gold, property, and other investment commodities often show short term rewards, the ups and downs of a mercurial marketplace can offset gains with sudden and often surprising losses. Witness the property crash in 2007 which precipitously shattered the notion that property, as investments, were “safe as houses.”
Compare this with the steady rise of violins. A study quoted in The Economist concluded that the annual rate of return for a Stradivarius violin between 1980 and 2011 was 15.4%. Sure, steady and significant with no sudden ups or scary drops.
No one has a crystal ball, of course, yet even as the stock market recovered over the years since 2008 and the Great Recession, instruments (violins in particular) continued their rising valuations unabated. While stocks go up and down in reaction to either broker’s fears of rogue governments, threats of resource scarcity, pre-programmed computer algorithms, acts of terrorism or political unrest and so many other unpredictable and, more importantly uncontrollable, factors violins appreciate in a steady and predictable fashion.
Of course, not all violins appreciate in the same way. Old Italian instruments, for example, have reached a scarcity and valuation that puts many of them outside the realm of consideration for the casual investor. The remaining instruments, whether made by a fine contemporary maker or an old French or German instrument, rise in a manner less predictable than the Old Italian Masters. A modern maker may see a modest increase each year, but suddenly become a significant maker by winning a prestigious award or being the favored maker of a prominent player….and with his or her rise in stature comes a rise in his/her instrument’s price. And the wise investor who saw the promise at the maker’s early years will enjoy a nice gain.
Old German and French instruments also rise, but perhaps not at the same rates as Old Italians. Achieving over 10% of growth is a high bar for any portfolio, but the stability of the asset makes them attractive to investors looking for diversity. If that investor is also a player, so much the better; having an asset that can be truly enjoyed (unlike, for example, a lump of gold sitting in a vault) creates another, less tangible or monetized, return on investment.
Good investments come at all ends of the marketplace. Certainly, violins that might require a second mortgage to purchase are solid and wonderful … but good, investment-grade, instruments can be found that are far more affordable to investors without great wealth.
It should be noted, that many of the fine instruments purchased purely as investments are not played by the owners. Often, a special arrangement is made with a musician or orchestra that needs such an instrument. In these arrangements, the musician (or orchestra) assumes the carrying costs of the instrument (upkeep and insurance, mostly) while the owner enjoys the appreciation of his or her investment. And the owner is often gifted many free concert tickets along the way!
According to The Wall Street Journal, the key to successful investing is to buy instruments that you like and that you understand. Vermont Violins has assisted many players and many investors find worthy instruments that have brought the joy of music into their portfolio while helping prepare for rocky financial times that may lie ahead.
If you are interested in learning more about violins as investments or would like Vermont Violins to assist you with finding a suitable instrument, please send us an email and we would be glad to set up an initial consultation to discuss options, price and terms. We can help you find a player to use the instrument and assume the costs while the instrument rises to a price at which you would want to sell. In addition to our own collection of fine instruments available for purchase, we often network with other fine shops to find the perfect instrument.