Vintage And Rare Gibson Guitars Are Bucking The Economic Trend And Proving To Be A Sound Investment

When was the last time you dusted off the boxes in the attic, sorted through the items in your closet or took a good look through your loft and stumbled upon a guitar case in the corner? Well back in 2007 an American gentleman did exactly that. When he opened up the guitar case he saw something very special inside, it was a highly prized 1959 Gibson Les Paul Standard in pristine condition. The Les Paul was valued by a reputable company and was told he could expect to sell it for a six figure sum.

Gibson Guitar is well known and highly regarded worldwide by guitar aficionados and guitarists from all musical genres for consistently producing the finest electric and acoustic guitars. Gibson has a unique history steeped in tradition, innovation and quality craftsmanship. On any given stage at any given gig around the world over the decades, chances are you would have seen the guitarist rocking out on his Gibson guitar.

These international bands range from the iconic Led Zeppelin, AC/DC, The Beatles, The Who, Free, The Rolling Stones, Credence Clearwater Revival, Thin Lizzy, Kiss, Guns N’ Roses, Oasis, Paul McCartney, BB King, Madonna, U2 to the Foo Fighters, Kings of Leon, Metallica, Joe Bonamassa, Lenny Kravitz, Aerosmith and Pearl Jam to name a few. This who’s who of rock n roll royalty is testament to the playability, durability and prestige of playing a Gibson guitar be it a Les Paul, SG, ES-335, ES-175, Explorer, Flying V, Firebird or a Super 400.

The trend for serious guitar collectors to invest in both vintage & rare Gibson guitars is not a new one, but it is becoming more attractive for non guitar collectors to focus their attentions on such instruments due to the substantial financial return say a vintage 1958 or 1959 Gibson Les Paul Standard or a 1961 Gibson SG could provide. For example a 1960 Gibson Les Paul Junior can appreciate by an incredible 500% after only six months of ownership. There is one particular factor that can guarantee a guitar’s appreciation. Aside from being in mint condition with original parts, electronics and paint, the guitar would need to be tied to a formidable artist or an event that resonates in the modern popular conscience, this would then give that guitar a far greater financial return when it comes to it being sold to a specialist dealer or at auction. However the vintage and limited edition guitar growth in market value is often quoted at about 15% per year on average, but these are generally limited to instruments built during the 1950’s and 1960’s.

Just about every guitar player wants to pick up a fine vintage or limited edition instrument. However, these days there are more than just musicians looking for masterpiece instruments from the 1930s through the early 1970s. Vintage and limited edition Gibson and Epiphone guitars are a great investment that only increases in value. In particular vintage Gibson guitars have consistently performed with more stability than the stock market. There are a number of reasons that collecting these types of guitars is an excellent strategy. For one, they’re more tangible than a company stock or bond. They give you an attractive piece to display, and are fun to collect. Guitars also don’t lose value over time, in fact, it’s just the opposite -guitars consistently gain value as they get older, as long as you take the time to keep them in good condition. If you’re a musician as well as an investor, you’ll appreciate the superior action and tone of a real vintage instrument. The most popular and sought after vintage guitar with collectors is the 1959 Gibson Les Paul Standard, often considered as the holy grail of electric guitars played by a legion of iconic musicians such as Jimmy Page, Peter Green, Slash, Billy Gibbons, Joe Perry, Gary Moore and Jeff Beck to name a few.

“It’s official – guitars are better investments than homes,” says rock ‘n roll memorabilia expert Ted Owen. They’re also better investments than stocks and shares. A 1958 Gibson Explorer bought for $247.50 in 1963 was sold in 2006 for $611,000 that’s almost a 20% year on year annual return versus an average of 12% for the typical house or the 9% typically produced investing in shares. Adam Newman, manager of Vintage & Rare Guitars says, “Late fifties Gibson Les Paul Standards bought for a few hundred dollars could be worth well over $300,000. With rock ‘n roll memorabilia auctions taking place on a regular basis, it’s now easier to purchase a vintage or rare guitar that in turn is a solid investment.

Auction houses such as Christies, Sotheby’s and Juliens are seeing a steady flow of vintage guitars coming through their auction rooms and are commanding very attractive financial returns for their owners. In March 2008 Anchorage Capital Partners announced The Guitar Fund, a $100m fund investing in the rare and vintage guitar market, citing an average annual return of over 31 per cent according the ’42 Guitars’ tracking index, created by Vintage Guitar magazine. The fund was reported to have a number of initial institutional investors for shares to the value of between $5m and $10m. Arguably the most desirable solid-body electric guitar of all time is the sunburst finish 1958-60 Gibson Les Paul Standard, commonly referred to as the ‘Burst. In his recent book Million Dollar Les Paul, UK guitar historian Tony Bacon charts the rise of this near-mythical beast, arguing that the $1m ‘Burst is all but inevitable, current economic events notwithstanding.

“The Vintage Gibson Guitar market has continued to grow over the past decade especially as investors realize how safe this market is in terms of diversifying their portfolio. It is a more secure market than most stocks or bonds and will only continue to rise due to the increase in foreign markets like Russia and Asia.Vintage Gibson guitars are the heart and soul of the pop culture movement as nearly every major artists in the history of Rock “N” Roll and music as a whole has played a Gibson or Epiphone” – Darren Julien, President/CEO of Julien’s Auctions.

There is no other manufacturer that has produced a greater variety of professional and prestigious guitar models than Gibson. Every guitar model that Gibson ever built has its own unique history and story, there are no two alike even if they share the same name . ‘I’ve noticed,” says Ted Owen, “that some shops don’t even put prices on certain guitars any more. There’s just a little note saying: Ask.” Owen is the director of acquisitions with the Fame Bureau, the memorabilia dealers located in Denmark Street, London’s guitar shop heartland. Rock guitars are the Fame Bureau’s speciality – and right now the market is booming. Put your money into bricks and mortar, they say. But, according to Owen, a small bit of nicely shaped wood with six strings and a few bits of metal attached could now be a better investment, they don’t even have to have belonged to someone famous.

The figures are eyebrow-raising. A 1959 Gibson Les Paul Standard in trademark sunburst finish popularised in the 1960s by Keith Richards and Jimmy Page, and considered by many to be the perfect guitar – originally cost about 225.00 USD. Now, says Owen, one can fetch up to $385,000 USD..”We didn’t have world war three,” says Owen. “We had rock’n’roll. These guitars are significant of a moment in time.” Particularly in demand are vintage and rare Gibson instruments specifically associated with the birth of pop. “They’re a status symbol,” says Owen. “They look cool on your office or bedroom wall.” In a way, presumably, that drumkits and keyboards don’t.

The price hike for vintage guitars was actually started by famous musicians, according to Adam Newman of Denmark Street’s Vintage and Rare Guitars. Newman’s biggest sale was an original Gibson Flying V, beloved of the Kinks and Jimi Hendrix that had a serious Spinal Tap rock madness overtones; it went for $923,000 USD. “They have a look that caught the moment,” says Newman. You have to spend a pretty penny to get one.” However, you don’t need a fortune to invest in all rock guitars. Newman says that a 1970s Gibson L-6S that would recently have set you back $925 USD would now fetch more than $1,800 USD since Razorlight’s Johnny Borrell started playing one. Nor must the guitars be in good condition. In fact, you don’t even have to invest in a whole guitar: a 1959 Gibson Les Paul Standard pickup surround – the plastic that goes around the part that picks up string vibration – can fetch up to a cool $6,200.

Published in: on May 12, 2010 at 7:25 PM  Leave a Comment  

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