Antique Italian Stringed Instruments as Investments

The buying climate for instruments by Antonio Stradivari and Giuseppe Guarneri del Gesù has dramatically intensified over the last two years (2003-2005). The demand is so great, with a total of only 800 instruments existing, that the market for these instrumental masterworks is the strongest it has ever been.

As can be seen in the graphs and table on pages nine to eleven, not only have rare Italian instruments steadily increased in value over the past forty-five years but they also have never decreased in value and have consistently outperformed the Dow Jones Industrial Average (DJIA) as well as precious metals by an enormous percentage: a 19,400 percent increase for the violins versus up to 1,800 percent for precious metals and DJIA.

A unique factor that further increases the demand and value of these exquisite violins is their functionality. Unlike precious metal commodities or stocks, most of the instruments have been in active use since they were created and are absolutely essential to the careers of the upper echelon of musicians, both top international soloists and members of leading orchestras. These violins, violas, and cellos are enjoyed by millions of music lovers around the world in concerts and recordings.

Recent rare instrument purchases have been mostly from Russia, Europe, Taiwan, and the United States. China will likely enter this market very soon due to the large talent pool of outstanding artists there as well as the ongoing economic boom which has already led to a great accumulation of wealth. Once the Chinese begin acquiring instruments, the price will begin to increase at an even more rapid pace. Conditions in the great antique instrument market today are similar to when the Japanese began acquiring rare instruments thirty years ago causing pricing to increase dramatically over the years. The difference today is that the rate of increase will likely be escalated since the availability of instruments will be less than ever before as these rare objects become increasingly dispersed worldwide.

Every year several major violins are acquired by institutions that will hold the instruments in their collections for generations. Add to this that some instruments are irreparably damaged or stolen each year and the result is an irreplaceable product becoming increasingly scarce.

The Chi Mei Foundation of Taiwan last year announced its intention to purchase $500,000,000 U.S. of rare violins over the next two years. The Japan Music Foundation, which has also been one of the most active buyers in recent years, continues to purchase great instruments for its collection. It is unlikely that instruments from these two organizations will be resold in the future.

Early Italian paintings were acquired by both public and private collections during the early years of the 20th century and subsequently have not been on the market for the past seventy-five years. We fully expect a similar situation to arise with the Italian instrumental masterworks within the next five to ten years.

Scarcity, combined with functionality, make great Italian stringed instruments an unparalleled investment now and in the future.

Market Analysis: Appreciation of Stradivari Violin, Silver, Gold, and Platinum Prices and the Dow Jones Industrial Average (DJIA), 1960 - 2008 Comparison: Stradivari Violin and Gold Prices, Percentage of Increase from 1960 - 2008 Comparison: Stradivari Violin Prices and the Dow Jones Industrial Average (DJIA), Percentage of Increase from 1960 - 2008

Market Analysis: Stradivari Violin Prices Compared to Silver, Gold, and Platinum Prices and the Dow Jones Industrial Average (DJIA), 1960 - 2008¹

Year Stradivari Violins² Silver³ Gold³ Platinum³ DJIA4
¹As of June 30th, 2008 ²Annual average price of a Stradivari violin ³Price per ounce 4Dow Jones Industrial Average on the last trading day of the year
1960 $18,000.00 $0.91 $35.00 $83.21 615.89
1961 $20,000.00 $1.03 $35.00 $83.50 731.14
1962 $22,000.00 $1.20 $35.00 $83.50 652.10
1963 $25,000.00 $1.29 $35.00 $80.93 762.95
1964 $28,000.00 $1.29 $35.00 $88.48 874.13
1965 $32,000.00 $1.29 $35.00 $98.04 969.26
1966 $35,000.00 $1.29 $35.00 $99.60 785.69
1967 $38,000.00 $2.06 $35.00 $110.25 905.11
1968 $42,000.00 $1.96 $35.00 $256.33 943.75
1969 $46,000.00 $1.81 $35.00 $201.75 800.36
1970 $50,000.00 $1.64 $38.94 $151.67 838.92
1971 $56,000.00 $1.39 $40.76 $109.50 890.20
1972 $62,000.00 $1.98 $36.07 $124.38 1,020.02
1973 $70,000.00 $3.13 $41.17 $154.30 850.86
1974 $75,000.00 $4.39 $59.00 $192.37 616.24
1975 $82,000.00 $4.09 $97.84 $150.26 852.41
1976 $90,000.00 $4.35 $158.96 $153.29 1,004.56
1977 $100,000.00 $4.71 $160.91 $157.71 831.17
1978 $108,000.00 $5.93 $124.71 $260.81 805.01
1979 $118,000.00 $21.79 $147.78 $445.69 838.74
1980 $125,000.00 $16.39 $193.39 $667.31 963.99
1981 $140,000.00 $8.43 $304.83 $445.99 875.00
1982 $200,000.00 $10.59 $614.61 $327.42 1,046.54
1983 $275,000.00 $9.12 $459.26 $423.54 1,258.64
1984 $350,000.00 $6.69 $375.28 $356.73 1,211.57
1985 $425,000.00 $5.89 $423.61 $291.47 1,546.67
1986 $500,000.00 $5.36 $360.50 $461.59 1,895.95
1987 $575,000.00 $6.79 $317.18 $552.57 1,938.83
1988 $650,000.00 $6.11 $367.72 $525.29 2,168.57
1989 $750,000.00 $5.54 $446.28 $507.27 2,753.20
1990 $850,000.00 $4.07 $436.79 $466.95 2,633.66
1991 $950,000.00 $3.91 $380.74 $371.06 3,168.83
1992 $1,100,000.00 $3.71 $383.32 $355.81 3,301.11
1993 $1,200,000.00 $4.97 $362.10 $369.84 3,754.09
1994 $1,300,000.00 $4.48 $343.86 $401.46 3,834.44
1995 $1,400,000.00 $5.15 $360.00 $420.77 5,711.12
1996 $1,500,000.00 $4.73 $384.12 $394.88 6,448.27
1997 $1,600,000.00 $5.95 $384.05 $388.42 7,908.25
1998 $1,650,000.00 $5.55 $387.82 $384.73 9,181.43
1999 $1,700,000.00 $5.22 $330.98 $377.93 11,497.12
2000 $1,800,000.00 $4.95 $294.12 $544.03 10,786.85
2001 $1,900,000.00 $4.37 $278.55 $529.04 10,021.50
2002 $2,000,000.00 $4.60 $279.10 $539.13 8,341.63
2003 $2,250,000.00 $4.88 $362.91 $691.31 10,453.92
2004 $2,500,000.00 $6.67 $409.17 $845.31 10,783.01
2005 $3,500,000.00 $7.00 $520.18 $1,000.12 10,717.50
2006 4,500,000.00 $12.00 $700.10 $1,1250.00 12,000.00
2007 $5,500,000.00 $15.34 $834.00 $1,528.00 13,092.00
2008 $7,000,000.00 $17.41 $973.00 $2,193.00 12,040.00

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After the passing of the legendary cellist and conductor Mstislav Rostropovich in 2007, his cello, one of the greatest cellos in existence — the "Duport," of 1711 was reputed to have been sold at $20,000,000 but this is unsubstantiated.

The greatest violinists throughout history, from Nicolò Paganini to Jascha Heifetz to Ruggiero Ricci to Itzhak Perlman, have used instruments by Antonio Stradivari and Giuseppe Guarneri del Gesù.