From James Dew
Posted December 10, 2007 at 06:52 AM
Firstly, modern italians, almost all of which are less than 100k, represent probably the best investment besides the really high end stuff.
Unfortunately I wouldn't look to Cremona if I were buying modern. There's like 800 makers now in that tiny little place, but it hasn't really proven to be as effective as the United States, UK, France, and Germany in terms of modern violin making. Go to the "news" section of this site, and go to December 3rd, or some date like that. Read the article that was posted on the value of violins over time. It reinforces everything I've said for a while now.
Get an instrument you enjoy playing. For everything else, start reading the business section.
Another perspective suggests that if one buys wisely, one can at least have free use of a very expensive violin, and probably make some money on top of that.
So much depends on the details though. If you take out a loan to buy the violin and pay interest, or own it for a short period of time and pay a commission to sell, things like these can eat up any potential profits. Also factor in the cost of insurance.
HERE'S A LINK to the article Pieter mentioned.
By the way, the term "modern Italian" in the article probably doesn't mean "contemporary Italian", but somewhat older instruments. I believe one of the authors, Philip Margolis posts here, so maybe he can clarify.
One factor required to translate the actual appreciation levels is to understand what, on average, is the sale value at auction vs. the retail sale value of specific makers, or groups of makers. For example, Sartory bows sell very well at auction, often near 90% of what one might expect to pay in a retail shop. While a popular maker before that time, auction sales at that level really began in the late 80s/early 90s. Other makers, from the same period and nearly the same quality, may only sell for 70% or less.
Just my 2cents.
I e-mailed the author and tried to get a reply. If it's the case that they're all auction numbers, then the numbers will definately be soft. Retail is where the real $$$ is at as far as I know, however I e-mailed a friend of mine who might know and he had heard from someone that they were in fact recording documented private sales.
I do know that there is a recent documentf floating around that was commissioned by one of the major investment firms specifically on this topic. These sorts of things are done often with a variety of commodities and given the wealth of the clientel, it wouldn't suprise me if they really did their homework. I'm told it's quite comphrehensive, but I have no way to really get a hold of it. All I know is that in general, high net worth individuals aren't generally being advised to buy violins over other types of antiques or investments.
So with regards to your question; if your heart is really set on that instrument, I hope you get a good price. With makers like Kelvin Scott and a few others under $15,000, I see no real reason to cross an ocean to get a violin when you can buy something pretty top class in Tennessee.
I think your friend may be mistaken. The following is a published abstract of Kathryn Graddy & Philip Margolis' paper.
"This paper measures the returns to investing in violins using two different datasets. One dataset includes 75 observations on repeat sales of the same violins at auction starting in the mid-19th century and another dataset includes over 2000 observations on individual violin sales at auction since 1980."
Philip's paper may paint a picture that I believe is off on a point or two (especially if you consider retail sales; which I think you really need to in order to present a complete investment picture), however it seems relatively accurate when it comes to pure auction sales... and gives a good general overview of the returns in that part of the market.
Frankly, while there are a number of us who are pretty well versed in the retail numbers (if you appraise, you have to be), I think it would be difficult to publish a paper that showed a complete and accurate view of dealer/private sales. Many buyers and/or sellers would not be excited about making those figures "public" across the board.
Don't get me wrong, though... I'm not saying that violins are a better, or even an appropriate, choice of investment for high-income speculators.
I think buying an instrument, for a musician, is primarily an investment in their career. Buying one that appreciates (not all of them do, however) does have some advantages for working musicians, depending on how you handle your taxes (appreciation isn't taxed until you sell the item, for example... and there are other advantages).
As you said, without retail numbers, you're getting only a tiny bit of the picture. That's why I'd like to get my hands on this other industry report I've heard of.
At the end of the day, your business is definately in no danger. No matter what any of these reports say, these instruments are a joy to own, and the market for them will always be there. When I do have more money one day, I will be buying old instruments and bows.
I posted some pics of my "NY VIOLA TRIP" here:
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