Why does everyone say vintage guitars are a bad investment?

Discussion in '"Vintage" Instruments' started by e???, Oct 1, 2018.

  1. sws1

    sws1 Member

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    Great examples of many guitars come up for sale all the time.
     
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  2. Jayyj

    Jayyj Supporting Member

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    Yeah, the idea that all the good ones got snapped up just doesn't really bear up. People sell for all sorts of reasons - there are the obvious reasons of death or financial hardship, but even within active collectors there are lots of different personalities and not every enthusiast has an ever growing collection. For every collector adding an A list piece every couple of years there's someone who's happy to own one for a few years, then sell it when an opportunity comes up to make a profit on it and buy something different with the proceeds.

    I'd agree there's a flood of player grade and C list collectible stuff out there these days, but I think that's more a combination of Ebay and Reverb opening up an online market for thousands of small shops and dealers that previously would have been selling to locals send at guitar shows etc, and the fact that the prices for really desirable instruments having risen to the point where many of us stay mostly in the shallow end where things are half way affordable so the desirability of player grade guitars as collectibles has risen dramatically in recent years.
     
  3. 70' s Tone

    70' s Tone Member

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    Perceptive and true!! ;)
     
  4. opdev

    opdev Member

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    I usually take my vintage guitars and have pretend concerts for all my Beanie Babies....

    I buy vintage on a combination of condition, price and liquidity. I'm paranoid so always make sure I'm not overpaying to the point I could not sell it (even at a 10% loss) if I needed to.

    You have to be patient. IMHO, everything vintage on reverb is overpriced. The VG guide is not perfect but it's a starting point and the range listed is for top condition guitars. So many of the guitars listed on Reverb and dealer sites exceed those ranges for 7/10 condition examples. So many 100% original "except"....... ads lol.

    I have a short list of stuff I want and I know what prices should be and I pounce when something comes up. I've been looking for a strat lately (tricky) but ended up with a '51 ES-5 (mint, blonde) popped up for less than market....

    To me vintage guitars are a pleasure to collect. Just don't get in over your head like anything else. And don't try to rationalize some overpriced guitar you think you want this week by calling it an "investment". And have some idea how fast you could sell if a situation forced it....
     
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  5. Kurzman

    Kurzman Supporting Member

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    "And don't try to rationalize some overpriced guitar you think you want this week by calling it an "investment"."

    Uh-oh
     
  6. PedalFreak

    PedalFreak Supporting Member

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    Same here. After having a few conversations with some serious, big name vintage collectors and sellers, I sold off all but a couple vintage pieces. For the most part I made a good decision. 1 amp went up in price, everything else dropped quite a bit and hasn't gone up. The people I spoke with still believe a larger drop is coming, and they're continuing to sell off high end pieces so they're not stuck.
     
  7. treeofpain

    treeofpain Silver Supporting Member

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    I agree. Most of the vintage amps did not reach the "bubble level" that some guitars did, so they did not experience the same fall. Even today, a lot of vintage amps represent a very good value intrinsically (the market price compared to what it would cost to build a new one).
     
  8. sws1

    sws1 Member

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    Even though I'm not a chicken little (people have been saying the guitar market would fall for 40 years now), I'd be far more worried about amps. In the guitarist's signal chain, the amps are the things being made most obsolete by technology and the live music scene.
    e.g., where are all those 4x12s that dotted virtually every club stage back in the 80s and 90s?
     
  9. treeofpain

    treeofpain Silver Supporting Member

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    Yes, the whole idea of an amp has different meanings today. I remember when Roland introduced the VG8 back in the 1990s, I said that modeling technology would eventually filter down to price points where it would take over. Then we saw the Line6 POD and other milestone products.

    Vintage amps, in general, are still valued as tone tools, historical items, and to a lesser extent cultural icons. A vintage amp in many cases carries little or no premium compared to a comparable replica or boutique amp.

    Practicality is still a big driver. Small combos with reverb (ie: blackface Princeton Reverb) have a higher value than larger amps (ie: twin reverb).
     
  10. deytookerjaabs

    deytookerjaabs Supporting Member

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    Boy I'd love me when of them 60's cabs, oowhee, I'd be a happy man if that market tanked. Yeah, in high school in the late 90's I had a half stack and not only was it normal...it was practically considered necessary by all my peers.

    As for where they all went? @Scumback Speakers has about 40 of them IIRC :eeks
     
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  11. Scumback Speakers

    Scumback Speakers Gold Supporting Member

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    Not anymore. I cut down about six years ago. I sold off 8 or 9 of the basketweave cabs. I took the money and invested it in old cars...specifically these two. But I still have about 9-10 I won't ever be selling, LOL.
    99 Coupe My wife drives this one since it gets better mileage than her VW Passat.
    [​IMG]
    04 Le Mans Limited Edition. I had this one supercharged, she drove this...once. I can't fit in a newer model than 04.
    So instead of sacrificing performance, the A&A Supercharger folks in Oxnard upgraded it. Just turned over 42k miles,
    and it's now got 650hp at the crank, and over 500 rwhp. So, his & her Vettes.
    [​IMG]
     
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  12. Stratman Dan

    Stratman Dan Member

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    If you put your money out there when the music stops, anything is a bad investment.

    Real Estate in 2006-2008
    Precious Metals in 2013-present
    Bitcoin 2018-present
    Stocks late 2018 to present.


    So, the question is, when will the music stop on vintage guitars....my guess? the same time it stops with classic cars from the 60's....when all the fuddy duddys trying to reclaim their childhood die off....so maybe 10-15 years?

    If i had to guess, i would load up on 70's, and 80's stuff....
     
  13. bluejaybill

    bluejaybill Member

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    Collectables in general are an iffy investment, easy to buy and always harder to sell, unless you have some credibility as a dealer or are a well known collector. But they pretty much rise and fall with the overall economy. The last big drop was in 2008 when the overall economy and stock market tanked. When the stock market goes down, people who collect things start to feel poor, and stop buying things. Same holds true for other collectable markets.

    In my avatar, I have two great old telecasters. One I sold just at the peak, the other I guess has lost 1/3 of it's value from the peak. I don't care- it took me years to find the guitars that I like, I got most of them before the big runup, and I don't particularly care if they drop more.

    If you are in it to make money, maybe it's the wrong thing for you. For me, it's a place to park some money that I can have some fun with. I can't get my other investments to sound like Robben Ford!

    Maybe when us old geezers pass on the market will become glutted and go down. I'll leave that problem to my heirs!
     
  14. sws1

    sws1 Member

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    I don't think we should look at 2006-2008 as normal market fluctuation. **** got way out of hand everywhere (houses, cars, etc.) before the crash, and dropped appropriately when wall st collapsed.

    The realization hit me when I was in FL and kept hearing the wrong people (for example, bartenders) talking about how many properties they owned and were flipping. Like a weird financial acid trip. Was probably 2006/7. Fortunately, I was successful is my choice about getting defensive.
     
  15. WoodenDuckMaker

    WoodenDuckMaker Member

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    Amateur investors think lightning strikes the same place twice. What happened with the early strats and les pauls isn’t going to happen again with todays guitars.

    I remember when the Star Wars franchise was restarted in 2000. People bought big orders of the action figures and posters. Now they are in every swap meet for $1 each.

    Successful investors have the foresight to invest in something most people don’t know is going to be valued in the future. The people who bought Rolex Submariners in the 80’s for $300 that are now worth $13,000. The people who bought Basquiat paintings when he was alive for a couple grand that are now worth millions.
     
  16. scotticus

    scotticus Member

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    I think what you said about "foresight" is the catch. How can anyone know before something blows up? I don't think you can. I think some just happen to already be there when the trend takes off, unbeknownst to even themselves. Then once they see the tide rising a bit around them, they buy up whatever they can. Right place at the right time?
     
  17. skydog

    skydog Supporting Member

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    I think vintage guitars (and most collectibles) are on the wrong side of the bubble now. It just doesn't seem that up and comers are all that nostalgic these days.
    Buying bitcoins @ $10K was smart on the left side of the bubble, on the right, not so much!
     
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  18. Mr Fingers

    Mr Fingers Member

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    ...because the majority of so-called "vintage" guitars are flawed, or in relatively rough shape, or modded, or not really vintage or excellent specimens to begin with. I think these are almost surely going to increase very little in value, if at all, in a world flooded with well-made, cheap new guitars, a large % of which are the same models as the old ones. The true vintage, truly excellent (playability, sound) is in a different category, with a greater possibility of increasing in value -- though whether this happens is iffy as it depends on the economy and musical tastes. Personally, I think no one is going to care about "Greeny" in 10 years. Who or what was Greeny? Well, son, I could tell you... but I'm dead, and you don't care anyway.
     
  19. sws1

    sws1 Member

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    Investing in an old guitar (or anything for that matter) is a gamble.

    But I’d bet a million dollars that you are wrong on this one.
     
  20. sws1

    sws1 Member

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    Here is an informed perspective from Charlie at OK guitars, who specializes in golden era ES guitars.

    This matches my personal perspective based on networking with informed folks (and not just dealers).

    ————-

    The Death of Vintage?

    Got your attention now, don’t I? OK, nobody is dying but the conventional wisdom has been that the vintage market will die as soon as the baby boomers (born 1946-1964) stop buying guitars. Where did this so called conventional wisdom come from? Well, not from me, that’s for sure. It’s most likely the result of simple logic. Most of the folks buying guitars from the 50’s and 60’s are folks who coveted those guitars as teenagers. It’s the same logic that the vintage automobile market clung to until it simply didn’t pan out that way. There is some truth to the logic but it isn’t the big picture.

    I’ve been buying and selling vintage guitars for about twenty years now. I started back in the mid 90’s, when the internet and, specifically, Ebay, opened up a worldwide market . It was a hobby until around 2006 when I started getting serious and my main source of income since 2010. From the mid 90’s until now, it is absolutely true that my biggest and most frequent customers have been between the ages of 50 and 65. Interestingly, the age of the clientele stayed about the same between then and now. Of course, if you were 50 in 1995, you are now at the top end of that range and if you were 65, you are probably not buying guitars any more (or anything else for that matter). I believe those who subscribe to the conventional wisdom about the vintage market have their data correct but they have misinterpreted it. I believe it has more to do with disposable income than it has to do with what guitars you grew up wanting. At around age 50-55 a lot of things in your life can change. Your mortgage may be paid off, your kids are out of the house and you may have downsized, college expenses are finished and your income is higher than its ever been. It doesn’t take an economist to figure this out-you simply have more money to spend.

    But it doesn’t end there. The belief that the generation behind the baby boomers won’t be interested in guitars from the 50’s and 60’s is faulty. Guitars from the 50’s and 60’s (and some 30’s and 40’s) are better instruments than most of them being made now. There is no doubt that there are some extremely good guitars being made today-especially from boutique builders. But the market still loves the classics and that’s what those conventional thinkers have missed. Disagree? here are some hard facts.

    I sell around 100 guitars a year. I keep track of the demographics of who is buying what. The big surprise this year was that nearly half of the high end vintage guitars sold by me were bought by folks under the age of 50. That still means lots of 50 and 60 somethings are buying guitars but, as they say in the commercials, wait..there’s more. It’s a little nitpicky but i sold a lot of guitars to buyers in the range of 50-55. Now, I don’t ask everybody how old they are when they buy something but I get a pretty good sense of it from the conversations. Note that a 50 year old in 2018 is not a baby boomer. I sold six vintage guitars in November. Only one buyer was over 60. One was 24. Two were in their 40’s and two were in there 50’s. The demographics are very similar for the entire year. Last year was a bit different-more boomers. Same with the year before. So, is 2018 a fluke or a sustainable change in the market place? Stay tuned. I’m betting on the latter.
     

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