Antique Violins as an Investment

For any investor the statement is "Show me the money". The value in antique violins is in their uniqueness. They look unique and they sound unique. Most importantly they are from a unique time in musical history. To know this and understand it shows the sophistication of the owner, past and present. There is a shared passion that has traveled through centuries. This creates a demand that is rather inflexible…the economic term is inelastic. Those who have this obsession, love violins and want as many violins as they can have in this lifetime, especially the old ones.

The antique violins in greatest demand are those from the Golden age of violin making centered in Cremona, Italy. This was home base to the greatest violin making families in history. Of these the most noted is the Stradivarius family. The reason that the violins of Antonio Stradivari command the highest prices is that his violins have set the standard for what a violin should look and sound like. People may like Amati violins, Guarneri family violins or those from Maggini but by far the largest demographic and the best know name in violins over history is ANTONIO STRADIVARI. The uniqueness of the wood used in his violins has never been duplicated. From this wood a completely unique sound is created. Some copies can come close and others claim that they duplicate the sound. They may be close to the sound or may duplicate it but they cannot duplicate the emotions of owning a certified original Antonio Stradivari violin. It is the look, the sound and the emotion of holding a bookmark in time.

The same applies to violins that are not from the masters. The story of violin making is a story of the history of the world since they were made and reflects economic and manufacturing development through the centuries. The centers of violin making have moved from Italy to Germany to Japan and now to China. Violins have been made by hand, in cottage factories and through the evolution of the mass production factory. The wood used in the violins along with the construction methods used is reflected in the quality of the violin. This is further reflected in the sound. A person with a trained ear and knowledge of the wood and construction techniques can usually identify where and when a violin was really made (tags and labels can be misleading). For some collectors this is enough. To them the look is the most important thing. For the most passionate collectors and players, the sound is the most important. How unique and beautiful the sound is the margin that sets a great violin apart from just a pretty violin. If one can trace the history of the maker or previous owners of a violin this can add to the mystique of a violin.

For some folks, the value of the violin is its history in their family. It is a matter of using master card to fix it up, buy new strings, buy some music, and invest in some lessons. To hear your grandchild play your grandfather’s violin is priceless. As business we can use concepts from Economics 101. We have already addressed the demand side. Demand is strong and stubborn. The population is growing and therefore so is demand for antique violins. On the supply side, there is no way that there can be an increase in the supply of genuine antique violins. In fact due to wars, fires, loss, damage due to incompetent repair and from accidents, many antique violins disappear from the supply side every year. The bottom line is that we have increased demand coupled with diminishing supply. Prices have nowhere to go but up.

The next question is; By How Much? I asked this question of my Luthier and his reply was an estimate of 2% per year. He was not very confident in this estimate as violin appraising is a challenge even for the experts. Everyone has a better idea and the buyer’s idea of price is always much less than the seller’s. So I did a couple of calculations. I got out my compound interest calculator. I figured that Antonio Stradivari was getting top dollar in his day for his violins but money went a lot further in his day. So I estimated that he made $50 for one of his nicest violins. So I put that into the compound interest calculator and typed in an interest rate so that over 300 years the present value is in the millions.

An annually compounded interest rate of 3.7% gives a present value of $2.7 million which is about what an original Stradivari will sell for these days. I wanted to cross reference this so I took out a book that is a collection of original violin sales advertisements from as early as 1891 and through to 1970. A Strad Copy with fine wood was $7.80 in 1891. Today a Strad Copy with fine wood could be 2 – 4 thousand dollars. A compound interest rate of 5% gives us a present value of $2700.

I know this logic is not perfect but an annual gain of 5% per year compounded is a fairly decent return on a secure investment. This is an average through economic good times and through bad times. During bad times, things such as precious metals and collectibles can be in even higher demand as a store of value. Quality collectible violins may be a very good investment as we head into the economic storm ahead.

Collectible Violins
a collection of violins with info and pictures