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How To Invest In Guitars: A Guitar Collector’s Top Tips

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Would you pay US$1,587,500 for a guitar?

This staggering figure is the actual price that Kurt Cobain’s left-handed Skystang I guitar sold for last month at auction (alongside an unopened pack of his American Spirit cigarettes that fetched US$5,200, a fact that astounds me even greater).

Before the legendary Nirvana frontman took his life in April 1994, he played that Skystang I guitar in 53 out of 63 shows during the In Utero tour from late 1993 to early 1994. It’s said to be the guitar he played the most—and the last guitar he ever played in a public performance before his tragic death.

kurt-cobain-skystang-guitar
Image: KMazur / Getty Images / Julien’s / Guitar.com

The Fender Mustang’s extraordinary auction price highlights a fascinating aspect of memorabilia and collectibles: People will go to great lengths to get their hands on a piece of history. This makes such historical items, particularly guitars, potentially very lucrative investments.

And if you’re thinking that only guitars with famous artist connections can fetch exceptional prices, let me assure you that you are mistaken. For example, Vintage Martin D-45s retailed at US$225 (S$302) in the late 1930s, and prices of these pre-war models today have skyrocketed to up to US$400,000 (S$536,400). These guitars weren’t graced by the hands of a rock god—they’re simply the most desirable and valuable acoustic guitars ever made.

I first spoke to Dino Yong, owner of Heirlooms Music, about why guitars are better investments than property. Now, we dive even deeper into the fascinating world of guitars as not just musical instruments, but also investment instruments that can yield significant returns. From vintage rarities to exquisite boutique pieces, let’s take a look at how to invest in guitars without getting shredded.

 

A Beginner’s Guide to Investing in Guitars: Vintage Guitars, Boutique Guitars, and More

  1. What are vintage guitars? And why are they worth so much?
  2. But older isn’t always better.
  3. What are boutique guitars?
  4. Why you might want to think twice about investing in electric guitars.
  5. How do I pick a guitar for investment?
  6. How do I ship a guitar from overseas?
  7. Is there insurance for valuable guitars?
  8. How to maintain and care for vintage guitars
  9. If it comes down to it, never fear guitar “surgery”.

 

1. What are vintage guitars? And why are they worth so much? 

Admittedly, Kurt Cobain’s million-dollar guitars aren’t purely vintage in their class. People aren’t paying 7-figure sums for an old guitar—they’re paying 7-figure sums for Kurt Cobain’s guitar. But that isn’t to say that guitars without any celebrity status outside the memorabilia market aren’t valuable in their own right.

“​​Vintage guitars have got a lot of residual value. For most new guitars—even those from famous brands, their value drops the moment you step out of the shop. I think it’s easily a 30% to 40% drop,” Dino tells me, and I immediately start rethinking my lofty dream of purchasing one of the beautiful new guitars calling out to me from the walls of Heirlooms Music.

“With vintage guitars, they’ve already reached a certain point at which the price is stable and has got a residual quantum,” Dino continues. “You may even make a bit of money if the market goes favourable.” 

If we assess a vintage guitar with pricked ears instead of with dollar signs in our eyes, we’ll likely find that a well-seasoned vintage guitar trumps a new one. I am no guitar connoisseur, but even I could hear the difference when Andre, one of the staff at Heirlooms, played a brand new Martin D-18 (S$4,250) and a vintage D-18 from the 1950s (S$18,000).

Why are there significant audible differences that you can hear from an old guitar versus a new one? “Some people say that it’s because the wood is more seasoned, and the sound is very robust, so you can really hear the resonance and the clarity of the guitar.” Dino explains.

If even my untrained ears can pick up on the older Martin D-18’s richer sound, I’m convinced that vintage guitars deserve their heftier price tags.

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2. But older isn’t always better. 

Some vintage guitars can easily cost in the 6-figure range, while others can be as low as $1,000 or less. So what makes a vintage guitar investment grade? It isn’t just about getting the oldest guitar you can find like an ancient artefact in a museum. Unlike those fossils, vintage guitars can be thought of as living, breathing instruments. The quality of the materials and craftsmanship plays a huge role in producing a great sound. For vintage guitars, there’s one time period when old really is gold.

“You have to hit the sweet spot. For vintage guitars, they call it the Golden Era. The Golden Era for Martin would be something like the late 1920s to early 1940s, when they got to know what they were doing, and were doing it really well,” Dino explains. 

Before this period, various changes were taking place in the world of guitar-making. For one thing, gut strings (yes, strings made from sheep or goat intestines!) were being phased out. In the early 1900s, Martin introduced steel strings that were favoured for giving guitars greater volume.

For another thing, Martin also developed the X-bracing system in the mid-1800s. If you’ve ever taken a look into a guitar’s sound hole to see its interior, you may have noticed some wooden struts (called braces) arranged across the inner part of the guitar’s top and back. This is the guitar’s bracing system, which helps to support the guitar and enhance its sound. X-bracing, as the name suggests, involves two pieces of wood arranged in an “X” shape. It grew up in popularity and today forms the backbone of the modern guitar.

“X-bracing and other guitar technologies were on the uptrend from the 1920s. But post-war, when production got ramped up, you can see some of the materials and quality started to wane,” Dino explains to me. “So the Golden Era is around the 1920s to 1940s. If you have a vintage piece from this period, it’s probably worth over about $10,000.”

But vintage guitars aren’t the only ones that can fetch a high price. 

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3. What are boutique guitars?

Something interesting I learnt from Dino is that in Singapore, our vintage market is not as mature as our boutique market. But what defines a boutique guitar?

Unlike vintage guitars, a boutique guitar has nothing to do with the guitar’s age. Instead, it’s defined by 2 main characteristics: It’s handmade, and it’s got a limited production. Boutique guitars are to commercially produced guitars what handmade jewellery made by a small local business is to jewellery from the likes of Goldheart or Lee Hwa Jewellery. It doesn’t necessarily mean that one is better than the other, but the way they are made is starkly different.

Boutique guitars are bespoke and custom-built by a single builder, most of which are based in North America, with others from Canada, Europe and Australia. “Some of them are so specialised that they rarely make beyond a dozen or so guitars each year,” Dino informs me.

dowina-pax-in-corde-gac-ds-peace-guitar
The Dowina Pax in Corde GAC-DS, also known as The Peace Guitar.

Just like how Patek Philipe luxury watches in scarce supply can sell for sky-high prices, certain small production boutique guitars can also fetch a pretty penny. My favourite boutique guitar in Dino’s collection was a custom guitar limited to 2 pieces—the Dowina Pax in Corde GAC-DS, also known as The Peace Guitar. It was created in support of Ukrainian refugees in Slovakia and has unique features such as a dove on its headstock and leaf inlays on frets 11 and 13. Possibly what fascinated me the most about The Peace Guitar was its back and sides constructed out of solid Purple Heart wood, which is naturally purple. This guitar’s price is $6,500, but boutique guitars can go much higher.

Perhaps the most well-known luthier out there is the highly-respected Ervin Somogyi.  “His guitars are selling in excess of $50,000 to $60,000 easily, even close to $80,000 some people say,” Dino tells me.  “And even for some of his disciples, like [Michihiro] Matsuda, their guitars are also not cheap—nearing $60,000 to $70,000.”

There’s another factor also bumping up Somogyi guitar prices. “There’s some speculation that Sumoji’s guitars are being collected by a lot of Japanese buyers or Chinese buyers,” Dino tells me. “They’re thinking that Mr. Somogyi is getting along in his years and doesn’t have any successor, so his guitars will be in the upper price range.”.

That being said, Somogyi guitars are on the higher end for boutique guitars, most of which rarely cross into the hundreds of thousands. Lower-end American boutique guitars would cost around $2,000 to $3,000. The most affordable handmade guitars are even less.

“We do have some builders from Canada or even Iran or the Middle East,” Dino tells me. “We don’t have those guitars because of trade restrictions, but we do know they list their guitars for less than  $1,000. And these guitars are still handmade and made by a luthier with a relatively decent build.”

One thing that I do want to add about boutique guitars: Generally, they aren’t the best choice for investment. “By and by, boutique guitars in general don’t appreciate a lot, if at all,” Dino confirms. “However, there are sometimes really good finds on the secondary market. You might be able to get a very good deal on used or well-preserved boutiques.”

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4. Why you might want to think twice about investing in electric guitars.

heirlooms-music-singapore-electric-guitars-on-wall
Heirlooms Music specialises in acoustic guitars, but is also home to some classic electric models.

Among the 14 most expensive guitars ever sold in the world, only 3 were acoustic guitars—2 Martins and 1 Gibson. The other 11 comprised 7 Fenders, 2 Gibsons, 1 bespoke guitar (Jerry Garcia’s “Wolf”), and 1 Kramer. Since it looks like electric guitars generally are more likely to fetch extraordinary prices, why aren’t we talking about investing in them?

“You’ve got to be good at identifying the originality and authenticity of electric guitars,” Dino warns me. “It’s known that it’s easier to forge and change the parts of electric guitars than acoustic guitars.”

Dino goes on to tell me about stories where people swap the neck, pickup, or other parts of an electric guitar. All it takes is a few screws. “It’s not unheard of,” he affirms. “There are cases where people are caught off guard after they purchase an electric guitar like this.”

As you can guess, you’ve got to know your stuff well to identify the authenticity of an electric guitar—from the guitar parts, to whether it’s period-correct, whether the materials are correct, and so on. But even then, Dino’s also heard of stories where such things can be replicated. All in all, electric guitars are not the easiest because they’re so difficult to assess accurately. 

Is the same true for acoustic guitars? While it’s not impossible to “forge” an acoustic guitar, it would certainly prove to be a lot more difficult. “The whole guitar is there for you to see,” Dino explains. “So it’s easier to assess it. You can even inspect it internally down to its braces, from the inside to the outside. This leaves less room for manipulation.”

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5. How do I pick a guitar for investment?

If you’re trying to pick a guitar for investment, here are Dino’s top 3 recommendations you should keep in mind.

Condition and originality

Like any collectable item, the priciest guitars are untouched. That does not mean it has to be in pristine condition. In fact, if you get a vintage guitar that’s collected some scratches and dents over the years, the last thing you want to do is try to repair it. All those war scars are part of that instrument’s history and originality, and to try and “fix” these “imperfections” is abhorrent to any guitar enthusiast. Not to mention highly detrimental to the value of the guitar. 

“I remember for one of the first guitars I got from Martin, I wanted to refinish the top. I got scolded very badly by the seller!” Dino laughs. “He said, ‘You’re nuts! The moment you touch this guitar, the moment you refinish it, the price will probably drop 30%.’ So I would rather you keep the guitar’s originality—it has more value.”

There’s a very famous guitar with a big hole in the centre so large that it’s almost reached the guitar’s sound hole. This guitar even has its own name and Wikipedia page—Trigger. The Martin N-20 classical acoustic guitar is owned by country artist Willie Nelson, who’s worn away at the wood over the years as he used a flatpick and strummed, strummed, strummed away. I laughed with a mixture of astonishment and delight when I saw this well-loved guitar. It’s definitely seen better days, but Nelson has room for no other guitar in his heart. He writes:

“One of the secrets to my sound is almost beyond explanation. My battered old Martin guitar, Trigger, has the greatest tone I’ve ever heard from a guitar. … If I picked up the finest guitar made this year and tried to play my solos exactly the way you heard them on the radio or even at last night’s show, I’d always be a copy of myself and we’d all end up bored. But if I play an instrument that is now a part of me, and do it according to the way that feels right for me … I’ll always be an original.”

The Tao of Willie: A Guide to the Happiness in Your Heart (2007) by Willie Nelson with Turk Pipkin

 

The (correct) Golden Era

The 4 most famous vintage “pedigrees” are Martin, Gibson, Fender, and the lesser-known Larson Brothers. But not all of their guitars are made equal. The most valuable vintage guitars are from the Golden Era—that magical period when the finest guitars were produced by a particular guitar maker. Emphasis on that last part, because what you may not realise is that the “Golden Era” differs for different brands and different types of guitars.

For example, the best Martin guitars for investment are from the 1920s to 1940s. As discussed earlier, this is because this period is when Martin had developed the best technologies and was using high-quality materials to execute them. 

Any brand has its signature item—Rolex has the Oyster Perpetual, and Hermès has its iconic Birkin bag. For Martin, it doesn’t get much better than the Martin D-45. “They call it the Holy Grail of acoustic guitars,” Dino says. “Their value is nearing $100,000 already. When we got it then, it cost about half of that amount.” During the D-45’s first run between 1933 and 1942, Martin produced only 91 such instruments. Today, these pre-war Martin D-45s are one of the most valuable acoustic guitars in the world.

History and heritage are key. That’s why for electric guitars, the Golden Era is around the 1950s to 60s instead. “The evolution of the electric came about with the invention of the pickup system,” Dino explains. Gibson was the first company to use the “bar pickup” in 1935, which utilised one of the first single coil pickups to amplify a guitar. They used it in their new Hawaiian lap steel guitars in 1935, before adding it to their first electric Spanish-styled guitar, the ES-150, in 1936.

1938-gibson-es-150-charlie-christian-guitar
Images: ImageShack/dduplan, Picker’s Supply

It was the ES-150 that famed jazz guitarist Charlie Christian began playing in the late 1930s, catapulting the idea of an electric guitar to the forefront of the minds of guitarists. Christian made the guitar and its associated pickup so famous that both are now named after him. Fast forward a couple of years, and what began as Hawaiian lap steel guitars and Spanish guitars evolved into electric guitars like the Fender Telecasters and Stratocasters as we know them today. The Fender Golden Era was in the 1950s and 60s before the company was sold to the Columbia Broadcasting System (CBS), after which cost-cutting measures led to a reduction in quality. 

Celebrity association

If a celebrity has owned or played your guitar before, that’s a very good sign you’ve got a winner.

“It’s not in this shop right now, but we have for example an Elvis Presley guitar that’s easily in the six-figure, even the seven-figure range,” Dino reveals. “When I purchased it, it was close to or in the six-figure range already.”

reach-out-to-asia-fender-stratocaster
Image: Guitar World

If you take a look at the top 14 most expensive guitars of all time, you’ll notice that there is only 1 guitar that was never owned by a superstar. Instead, the Reach Out to Asia Fender Stratocaster was signed by many rockstars, including Mick Jagger and Keith Richard (of the Rolling Stones), Eric Clapton, Brian May (of Queen), Mark Knopfler (of Dire Straits), Paul McCartney (of The Beatles), Sting (of The Police), and British rock band Def Leppard. Whew, it’s like the Rock & Roll Hall of Fame on a guitar! This guitar sold for US$2.7 million in 2005 in aid of victims of the 2004 Indian Ocean tsunami. Considering that a new Mexican Standard Stratocaster cost around $350 in 2005, this guitar is a great testament to the power of celebrity association.

If you’re looking at guitars that have been played on or owned by a famous musician, Dino says that these guitars come with provenance, a certificate of authenticity, letters of ownership, and other official documentation. Make sure you have all these things before you make such a high-value purchase.

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6. How do I ship a guitar from overseas?

“Good question,” Dino says. “If the guitar is really expensive, besides getting a good courier, you have to get it fully insured.” Even then, be realistic. Dino’s still had incidents where, despite all the best packing, some damage occurred during transit.

If you’re worried, there is another thing you can do, especially for rare and pricey vintage guitars: buy your guitar a plane ticket. This way, you can carry the guitar as your hand-carry and park it safely in the seat beside you.

If you’re flying with your newly purchased guitar, Fender also recommends loosening the guitar strings before boarding to help it adjust to the changes in temperature and atmospheric pressure. You might also want to pack the guitar case with extra shirts or towels, especially at more vulnerable points like the guitar neck. Adding a piece of cloth between the strings and fretboard can also help to prevent friction as the guitar moves during transit.

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7. Is there insurance for valuable guitars?

Yes, but not locally. The guitars at Heirlooms Music are covered under the shop’s standard insurance, but Dino has collector pieces locked away in warehouses too. For these instruments, local insurance providers don’t provide the necessary coverage

 “It’s only the American insurance that does it,” Dino explains. “It’s a very high-end insurance that you have to get. We got it from Chubb, and it’s not cheap as it’s quite specialised.”

Insurance for an investment-grade instrument won’t come cheap. But like travel insurance, health insurance, or any other kind of financial safeguard, it’s worth it to protect yourself and your assets.

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8. How to maintain and care for vintage guitars

heirlooms-music-singapore-vintage-guitars

As the name suggests, vintage guitars are old. So you might be thinking that vintage pieces are going to be a lot more difficult to maintain than modern ones. False! The upkeep of a vintage guitar is no different from your modern guitar.

“I have about 20 guitars, vintage ones, that I hang and put out in the open in my home. It’s a breathable wood,” Dino explains to me. “Storing in cases is something that I would probably not advise. It’s better you put it out in the open, as long as it’s away from the sun.”

Dino’s words ring true to me as I know firsthand the detrimental consequences of storing a guitar in its case. The very first guitar I owned was an old, banged-up classical guitar my grandmother fished out of the deep recesses of a dusty cupboard. To say it was dated would be too kind. When given to me, the guitar was already in poor shape and was very difficult to play—even my guitar teacher said so.

But after I got a $100 replacement guitar (because any guitar would be easier to play than that ancient one) I tucked that first guitar into its case and forgot about it. In my head, the case was a dust bag. In actuality, it was a death sentence. The guitar quite literally fell apart when I opened up the case a few months later, its neck and other parts splintering dramatically from its main body as I withdrew the dying instrument from its inadvertent coffin. RIP.

Generally, you want to let your guitar breathe. Fix problems if or when they come. If the wood of a guitar expands, its action may be too high or too low. Perhaps it may start buzzing—that’s a displeasing, frustrating sound that a guitar produces when something’s not quite right. 

If you don’t already know what buzzing sounds like, you will once it happens to you. Should you find any of these undesirable phenomena happening to your instrument, it’s time to bring it to a luthier for repairs. Guitar repair services in Singapore include Luthier Singapore and The Guitar Doctor.

“Any guitar problems that prevail for a modern guitar, you will probably see in a vintage too. So it’s not that big a difference,” Dino clarifies.

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9. If it comes down to it, never fear guitar “surgery”.

truss-rod-guitar
Image: Guitar.com

There is one thing to note about the upkeep of vintage guitars—some older vintages do not have truss rods. These are metal rods that run along the length of a guitar’s neck beneath the fretboard. Turning the truss rod lets you adjust the action of the guitar (i.e. the space between the strings and the fretboard that you press the strings down onto). 

“The missing truss rods in older vintages is something that people are afraid of. They think that if they buy vintage and something happens to the guitar’s action, there’s nothing they can do,” Dino shakes his head.

“Firstly, there are things you can do to prevent that in the first place. But in the worst case scenario, you have to do a neck reset,” Dino explains. Neck resets have to be carried out by a specialist. The luthier must know what he’s doing, especially with a vintage guitar as some of its glues and adhesive methods may be more delicate.

“It sounds like surgery,” I observe. Dino laughs and agrees: “It’s like surgery, yeah!”

Don’t fear guitar surgery though. Dino once had a 1920s Martin 00-18 that had broken into 8 pieces. They worked hard to restore it: “We put it back together properly with the correct glue and construction method. The top is new, but the back and sides are the original. You wouldn’t be able to see the differences—very, very sparingly.” The restored guitar was eventually sold to local guitarist (and Dino’s pal) Neil Chan, who was fully aware of the guitar’s origins and was delighted to have the instrument all the same.

“Don’t be afraid to invest in a vintage guitar just because some people say that it’s more fragile, or it’s like an antique,” Dino emphasises.

I had the privilege of holding and strumming some of Dino’s vintage guitars in Heirlooms Music that day—specifically, a 1942 Gibson Banner guitar built by women during WW2 (read about that here). And let me tell you, it did not feel fragile or frail. If anything, this guitar sat heavily in my hands and produced a beautiful, effortless sound in a way that begged the guitarist to play it more.

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Hear more from Dino in part 1 of our chat: Why Investing In Guitars Beats Investing In Property

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