Why invest in rare stringed instruments?
The rare stringed musical instrument niche represents half of a $22 billion industry. No new supply exists and demand grows continuously as the global population and awareness of the investment value of stringed musical instruments increase. • Substitution of supply is controversial. New violins may have similar sound qualities but their time-tested resilience and personae do not generate the same emotional performance. Given the choice, musicians prefer to play on, and many listeners prefer to hear, an "original." • Market inefficiency. Only a few individuals in specific regional territories closely control information and knowledge about availability and demand. Opportunities exist to buy instruments with greater likelihood of future appreciation. • Market discrepancy. Other artwork, of similar rarity and quality, has achieved very high absolute dollar prices. This market discrepancy suggests a large potential unrealized appreciation potential for the owners of exiting rare stringed instruments. • New institutional demand. Large asset managers’ requests for alternative investments having financial performance attributes not closely correlated with stocks or bonds signals new institutional demand for the type of investment profile that rare stringed musical instruments represent. • Store of Value /Demise of Seigniorage. High Net Worth individuals and large asset managers seek investment opportunities independent of government controlled monetary and fiscal policy. Proceeds from the recent sale of stringed instruments have significantly surpassed their original purchasing power. The geographic mobility of musical instruments, unlike real estate, means that they are not confined to one governmental tax jurisdiction. • The prices of rare stringed instruments have constantly increased for many decades. The same powerful forces that created steadily growing demand for rare stringed instruments over the past 10 years will continue to operate in years ahead.
