The Finest Violins, Securitized.

Edited: September 6, 2022, 6:11 AM ·
I'm horrified at how the finest violins have become securitized. As one of a kind instruments, these violins (and cellos, violas) have been bought up by investment firms, large corporations, and mega-wealthy individuals, and the selling prices of these instruments have soared beyond imagination, and certainly beyond an individual musician's ability to purchase.

I'm curious about, and would like to hear about others' perceptions of, how this horrible, insidious, transition transpired. What are the entities that initiated this terrible trend?

There was a time when great violinists, violists, and cellists could choose their lifelong instruments, to the benefit of their playing and their contribution to the musical world. What a perversion it's become that these great instruments are now "bestowed" upon worthy musicians, based on what is most profitable for the investment firm, corporation, or wealthy individual that owns them.

Replies (42)

September 6, 2022, 5:46 AM · I take a slightly different viewpoint.
These instruments are old. They were not acquired by the current owner from their maker. Thus for a very long time, it has not been a matter of finding an instrument you like and buying it. The seller has to be willing to sell it to you. In the case of exceptional instruments the seller will likely consider factors other than money. Do they think the buying would be a worthy owner?

On another note, for centuries non-professional musicians have purchased important violins, or been gifted them. This is nothing new.

If we look at other fields, there is little complaint that paintings are owned by museums, as opposed to private artists.

All of this being said, there are some amazing instruments out there that are not owned by corporations. They are not necessarily cheap, but a violinist can find a life long instrument without applying to a corporation.

September 6, 2022, 6:29 AM · I don't really think it's a matter of who owns these instruments unless they're owned by truly Evil People. I think it's a matter of whether and how they are made available to musicians for practice and performance.
September 6, 2022, 8:51 AM · The world of financed will monetize just about anything of value. Scarcity makes the violins from the shops of the "Great" makers a commodity worth purchasing.

In some ways, this clears the field for current makers to get into the hands of top performers.

As with all things human, anything of value will be monetized for the benefit of the most wealthy.

If only we had Mr. Peabody's "Way Back Machine" we could go to the shops of the luthiers and buy up their instruments for a pittance.

Edited: September 6, 2022, 10:05 AM · I can't see why this should be a matter for concern to humble players such as ourselves. I'm always interested to see and hear top soloists play instruments by contemporary makers rather than the "finest", whatever that means. It's pretty well established that audiences usually can't tell the difference.
Edited: September 6, 2022, 11:10 AM · In the investment world, there has been a constant search for assets that are uncorrelated to others and will still offer a good return. A lot of recent attention has been directed to paintings and sculpture to solve this problem, but some research (using thin data, mostly) has also attempted to show that violins have outsize returns compared to other hard assets.

When I was doing endowment consulting, I ran across someone raising a private equity fund to buy a bunch of fiddles and then flip them after 10 or so years. It was probably just a matter of time before someone floated a SPAC or something like it to buy instruments.

In days gone by, it wasn't impossible for an ordinary professional musician to get a decent antique. I remember a time when a Gagliano, for example, would be priced like a used luxury car, and not like a house. Even then, though, the top of the tree was hard to afford. 100 years ago, you find references to "priceless" Strads worth $50,000, which was a lot of money. After WWII, Americans and the few surviving European capitalists had an edge in buying fine art, but they had to give up more conventional lucrative investments to do that.

In Stradivari's time, a lot of purchases from the very best makers were made by churches and royalty. And when Beethoven was given a string quartet of allegedly fine instruments a century later, it was a consortium of princes who raised the money.

September 6, 2022, 11:11 AM · I agree, Neil. The world of violins, like most art, is primarily a means of money-laundering.
September 6, 2022, 11:15 AM · Part of the price rise is monetary inflation. The Federal Reserve Bank was created 100 years ago for two purposes; provide liquidity during bear markets, and prevent inflation. It failed the first job in 1929-, and has tolerated at least 1% inflation per year since then. A pro. level violin costs as much as a new car, a soloist grade violin costs as much as an above average house. In one of his books, Carl Flesch points out that all of the major soloists started and made their reputation on lesser equipment, like a Guadagnini or Vuillaume. Those are now also out of reach for us ordinary fiddlers. They would buy the Strad or Guarnerius later.
September 6, 2022, 11:39 AM · There has been a bit of catching up. When I was in All-State, one of the coaches regaled us with stories of a Guad that he bought for $6,500 from a classified ad. This was around 1980, and market value was more like $40,000. A good Strad would have been at least 10x that, but it wouldn't have been too far from many other decent Italian instruments. Since then, Guadagnini has been taken to be the poor man's Strad, and has gone up well past its previous peer group. Vuillaume, not so much, although that might change.
September 6, 2022, 12:35 PM · There are an awful lot more (JB) Vuillaumes than there are (GB) Guadagninis, as far as I know. Still, today a JB Vuillaume will probably sell for what a GB Guadagnini did 20 years ago, if I recall past pricing correctly.

In any event, fine violins have never been bought by ordinary people. Stradivari made for aristocrats and the wealthiest of the merchant class. So did the makers down through the centuries. They sold to the upper crust patrons, who bestowed them at will to their court musicians and the like. Ordinary people could buy workshop violins more locally, and eventually, from outlets like the Sears catalog.

Fine violins by sought-after makers have risen approximately in line with the S&P 500 -- in other words, essentially following inflation. The supply of antique instruments -- whether violins or other members of the modern string family and their associated bows -- is declining slightly as old instruments are subject to various forms of loss.

We WANT some percentage of fine antiques to vanish into collector vaults, because this is the only way that those antiques will be preserved for future generations to examine. Many of the finest instruments of 20th century soloists have gone to museums, corporations, and collectors who are holding them protectively, to be examined by appointment (for instance, by scholars, or luthiers who are making copies) and played occasionally at commemorative concerts. That's a fitting fate for these precious relics of history.

The rest are in the hands of soloists, concertmasters, and some folks lucky enough to have acquired them decades ago when they were still reasonably affordable, or willing to have spent money on a luxury now.

In many cases, when a wealthy individual, corporation, foundation, or government acquires an instrument to loan, they are doing so with a particular recipient in mind. This is not a bad thing; they're supplying capital to an often young player. The instrument gets played and a musician who will love and take care of it. The owner reaps the benefit of appreciation when they eventually sell it, but I think of it as largely a gesture of philanthropy, since chances are that any financial benefit won't be seen by the generation of owner that purchased it. (If it's sold on their death, it will benefit their estate.)

There are abundant fine modern makers today. Those instruments still aren't cheap, because good wood is expensive and makers need to be able to pay their rent and eat. (Someone like David Burgess, who is highly successful by the standards of modern makers, has certainly been clear on how it's a profession that's not financially rewarding.) But a fine modern violin will still set you back the price of a typical luxury midsize car -- or at most, the cost of a Tesla (for a Zygmuntowicz). Nevertheless, that's arguably within the means of both professional and amateur players.

The standards of workshop violins today are excellent, and there are abundant 19th and 20th century workshop violins that have survived and are still available at highly affordable prices. Plenty of students and amateurs are perfectly well served by what's available.

Edited: September 6, 2022, 3:27 PM · In addition to Ms. Leong's comments, the violinist matters. Any good violinist will sound great on a decent instrument with excellent setup. Of course some violins are better than others. But you can do pretty good and any well-made instrument, even no-name workshop-made violins (which is not saying that modern violins should not be sought after-I am talking more from a "value" proposition. Not everyone can afford the best provenance/better known makers' violins. But you can still sound pretty great on a proper instrument without any glaring problems and with the "best" setup possible.)
September 6, 2022, 6:59 PM · Personally I think it's not such a bad thing. Musicians can still afford a great instrument- they, and their audiences just need to relinquish the notion that this great instrument must be a cremonese example from the classical period. Ten or twenty years ago a Vuillaume was considered a lesser instrument. Today, largely due to Hilary Hahn it's considered worthy of a soloist. The violin isn't any better, but perception has changed. In another ten years Joseph Hel might enjoy the same allure. There are plenty of great violins available. More than ever perhaps?
Edited: September 6, 2022, 7:07 PM · Violins are not good investments. They are illiquid, low yielding, and have a negative cash flow.

David Fulton, who collected the most valuable private collection of "the best" Cremonese violins and French bows ever assembled, recorded his average annual yield after selling most of it at 5.54%.

Historically, he would have done much much better investing in an S&P stock index fund.

September 6, 2022, 7:47 PM · Personally, I have no objection to capital markets and profit making whether it's violins or anything else, providing it is legal. There is nothing immoral or unethical about expensive antique fiddles being acquired by wealthy folks or foundations. If these fiddles were cheap enough for every great player to own; 1.) there would not be enough of them to go around and 2.) many more instruments would get lost, broken, stolen, or worn out.
September 6, 2022, 8:22 PM · The JBV price has gone up in part because of Hilary Hahn and in part because the older Italian instruments are even more scarce these days. And the more expensive an antique gets, the better it sounds ;)

A good contemporary maker would be the best bang for one’s buck, if one was starting a professional career.

September 7, 2022, 11:11 AM · Dimitri said "A good contemporary maker would be the best bang for one’s buck, if one was starting a professional career".

True, but there are also established soloists playing on contemporary violins... maybe they have to reach a certain point in their career before the critics and public can forgive such a transgression?

September 7, 2022, 12:37 PM · Much of the monetary value of Stradivari violins and such has to do with their having been successfully entered into the "antiques and collectables" market nearly 170 year ago. Vuillaume was one of the major influences in moving violins into this category.

So monetization of these violins is nothing new. Even players today will include in their program notes that they are playing on a Stradivari or Guarneri. Not only will this make the violin sound better in the ears of the listener, but the player MUST be darned good to have acquired the use of such an expensive violin!

September 7, 2022, 12:37 PM · Joel, don't blame the government for violin prices.

The prices for fine violins have ALWAYS been expensive. As I remember, Kreisler paid $25,000 for his Strad, a fortune even 100 years ago.

September 7, 2022, 6:38 PM · Personally I'd be more impressed if the programme notes stated that Mr Vengerov was playing on a 1976 Skylark. Sort of.
September 7, 2022, 9:13 PM · Plenty of fine violins aren't that expensive. They just don't have historical value.

You may want to change your title to "historically important violins, securitized".

Picasso paintings sell for millions, but I certainly wouldn't call them the "best" paintings. They're just historically important. Meanwhile, I can hire a local artist to paint something that I'd enjoy, for just a few thousand bucks.


Also, you seem to have reservations about these violins being bestowed to high level musicians. Would you rather they be put in the hands of amateurs?

I think important violins are right where they should be: in soloists' hands, and in vaults.

Edited: September 8, 2022, 12:53 AM · One day the world will wake up to the fact that violins are the most absurd artifacts to be valued as if they're uniquely sacred relics. The most prized instruments are no more beautiful to look at than the rest and 99% of the population can't tell the difference. When it comes to sound the same applies. I wonder what satisfaction a collector gets from occasionally handling a treasure that spends most of its time in a bank vault, or on loan to someone who's deluded into thinking it'll make them a better player?
September 8, 2022, 1:24 AM · I beg to differ, Steve.

Art has only gone up in value.

Stocks continue to go up, and we embrace higher and higher P/E ratios as acceptable.

Even cryptocurrency has gone up over time, despite having no intrinsic value.

Historic violins will continue to go up in price.


I also don't think that top tier players are deluded into thinking they play better on strads vs a nice modern instrument, as much as they know their audience will receive their performance better if they know it's on a strad or guarneri (or guadagnini, now, too).

September 8, 2022, 9:25 AM · Plenty of art has gone down in value. I'm not just including the dreck you get at the airport, but also tremendous amounts of previously-cherished masterpieces. Look at the prizewinners of the 19th century, and ask what people would pay today for them. Landseer and Pre-Raphaelites spent a long time in the wilderness, for example.
Edited: September 8, 2022, 11:19 AM ·
So many interesting perspectives on this topic.

After the great recession, I have a deep suspicion regarding securitization. Securitization of companies in the form of stock offerings is an often necessary option for raising capital. And if the company is successful, it's a way of sharing that success with so many others. But, securitization of mortgages themselves resulted in a ruinous, disastrous turn of events. So, it's natural that one would be at least skeptical about securitizing great violins.

To respond to Erik Williams comment, I have no reservations regarding bestowing fine violins to high level musicians. I meant "worthy" musicians in the best sense of that term. In fact, I can see where it's possible, there are truly worthy musicians receiving great instruments today, who might not have under the previous, transactional means of distribution. Will this persist?

There's been so much research towards determining how Amati, Stradivari, del Gesu, etc, were able to make instruments that sound so beautiful. The latest I've heard, is that the concoction used to prevent these fiddles from becoming infested with wood worms, also resulted in their beautiful sound. Whatever, I suspect that the methods used by Stradivari and del Gesu were variations of the same.

Wouldn't it be delicious, if this research were so successful that suddenly, hundreds of luthiers 'round the world could make violins of the same quality as those being hoarded by investors. The thought makes me smile. (-:

September 8, 2022, 10:20 PM · If a contemporary maker could offer me a violin that sounds and responds like the Strads I've tried, I'd purchase the thing on the spot. I've played a violin made a few decades ago that's almost as good as my JB Vuillaume, and I've played various other top-dollar moderns that were excellent but not to my taste. But I've never come across anything else like a Strad.

However, there are plenty of fine violins that are not awesome, and where in fact I might choose a largely anonymous decent-quality violin (new or old) over them.

Even if there were abundant moderns that beat the very best that antiquity has to offer, the historical artifacts would still likely hold or increase their value as essentially pure museum collectibles.

September 9, 2022, 1:51 AM · Lydia, I'm ordering a violin from a Romanian player/Luthier. I'll let you know if it's as good as I'm hoping it is! It's very cheap (8000 euros), but given some of the clientele that use his violins (schlomo mintz has one), I figure it's worth a try!

I've never gotten the chance to try any Strads or Guarneris, so I suppose I lack the ability to compare to those.

September 9, 2022, 1:16 PM · FYI- from Bachmann's Encyclopedia of the Violin (1925)
Violin prices in 1900 / 1924.

Strads: $4000-12,500 / $9000--30,000
Guarnerius del Gesu; 3000-12000 / 7500--25,000
Guadagnini; $600-2500 / $2000--8000
Vuillaume $400 - 850 / $750 -- $1500 (cheap!)

For comparison: 1930;
Average new car $600
Average new house $3900

Edited: September 9, 2022, 7:18 PM · I don't think violins are in danger of being securitized; as investments they are rather specialized and somewhat opaque in terms of attributions. But nevertheless they will probably get more expensive with deeper pockets bidding up the prices, and more unaffordable for more people as the level of economic inequality increases. From 1980 to 2022 in the United States for instance, the wealth disparity has grown significantly, where the top one percent of earners now take home 20 percent of the county's income as opposed to the 10 percent in 1980 when Jimmy Carter was President. The wealthy today enjoy a higher standard of living, which allows them to spend more money on luxuries.


September 9, 2022, 7:41 PM · I don't disagree on economic inequality, but I'm not convinced that the top 1% of earners in the US enjoy a higher standard of living than the 1% did in 1980 -- at least not beyond the general increase in things like TV screen size, smartphones, and other consumer tech.

I think those who earn 1% incomes are highly disproportionately living in a handful of extremely high cost-of-living urban centers -- San Francisco, NYC, LA, Boston, DC, especially. In the first three, especially, the cost of housing has escalating amazingly, which means that there's less money than one might expect for luxuries. (If you're single and are willing to live in a tiny apartment, there is indeed quite a bit more money for nice toys, granted.)

The 0.1% is a different matter, of course. If you look at the statistics, it's really the 0.1% more so than the 1% who have really gained.

September 11, 2022, 12:29 PM · If the OP wants to be outraged you can look at the very real disparities in education in America.
Music and the arts in general are icing on the cake that exist in many places in such limited ways, many in wealthy parts of cities and burbs cannot even begin to imagine.
Attaining the education and access to the training needed, accomplishing at a level of needing a great violin is a moonshot for anyone not of a upper upper middle class background.
The fairness or unfairness of the violin world, instruments or access, is unimportant compared to the general insecurity, education pointed at being a wheel in someone's cog rather than democracy, and the buying and selling of healthcare, a basic human right.
Edited: September 11, 2022, 1:01 PM · If the 1% aren't enjoying a higher standard of living than in the 80s, it's precisely because they got exactly what they wanted and lobbied for, which is the low taxes, sanctioned tax evasion, continued oil and gas subsidies, restrictive zoning laws (etc etc etc etc etc) that have increasingly hollowed out American society, so that now they can pretend like the granting of their wishes wasn't the exact thing that resulted in all the homeless around them now defecating around their luxury condos, or the wildfire smoke that they can't escape no matter how far they go.

Today is our anniversary of getting our permission slip to go and light the middle east on fire. Even if only 10% of the 1% are part of the 0.1%, the 1% and more are totally complicit.

Edited: September 11, 2022, 7:55 PM · You're confusing the 1% with the 0.1%. The 1% are mostly people who are paid high salaries for high-skill work -- doctors, lawyers, executives... concertmasters. :-)

As wage-earners rather than people living off investment income (or taking advantage of interesting tax loopholes like hedge fund managers do), this group of folks pays high taxes because for the most part there aren't really effective tax shelters for "salarymen" (as the Japanese would say).

(But these are, granted, absolutely the folks whose parents enacted restrictive zoning -- in that generation probably to keep people of color out -- and in the current generation those zoning laws tend to be retained to 'keep the schools good'. These are, however, precisely the parents who pay for intensive musical training and are likely the staple families of the higher-end music teachers in town.)

This is the class that David Brooks called the "bobos". Highly educated, liberal, probably eco-conscious and woke, but also fond of their suburban enclaves and avocado toast. (They are also likely a prime source for contemporary violin commissions, note.)

Edited: September 12, 2022, 1:30 AM · I understand that the big lobbying comes from those in that 0.1%, and those people are largely driving the speculative art markets, and are a great deal of the "patrons of the arts" that can magnanimously drive the careers of their favorite (pets) artists, but to even crack the 1% is a pretty tall order, even for a lot of doctors. For example, this list gives the floor of the 1% in Colorado in 2018 (I'd wager it's a good bit higher now), where I live, to be $458,000 per year for a household, which might be doable for two doctors.

https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to-be-in-the-top-1percent-in-every-us-state.html

But, even if they aren't the active lobbyists, and depending on their industry, they might just be, they are (and I am for the matter, despite not being particularly close in earnings) complicit in benefiting from and accepting all that comes from the more active work of the top of the pyramid. Colorado just gets more and more libertarian the more money moves in, and we can't vote to increase taxes and pay teachers to save our lives (and we literally can't raise taxes without putting it to a statewide vote). And then the bottom half of the 1% still invest in real estate and various ventures that end up punishing everyone else so that they can can keep up as the treadmill gets faster.

I would be surprised to meet a doctor or lawyer that didn't have a pretty substantial investment portfolio, and I anecdotally know a lot of strivers whose goals involve some kind of passive-income (rent seeking), which is a coherent response to the socio-economic conditions around them, but ends up just accelerating the tragedy-of-the-commons we all find ourselves in.

Anyway, my "illuminating" societal critique :-)

September 12, 2022, 5:07 PM · Top 1% of households is $504,420 for US households in 2021. Top 1% is $357,552 for single earners (again US 2021). I'm guessing that this is somewhat attributable to widening economic disparity and the L-shaped recovery from the pandemic.

But you're right that this is absolutely the demographic that invests, although I think the physician is probably more likely to buy a first-rate contemporary than a rare antique. (Though I've certainly encountered both in my experience.)

September 12, 2022, 5:10 PM · True, and at least doctors are probably more likely than most to know what to do with a nice contemporary fiddle.
Edited: September 14, 2022, 1:34 AM · A fat bank balance never made anyone a better musician!
Edited: September 14, 2022, 3:15 AM · Again we have generalizations. What a doctor makes depends very much on specialty and region. The family practice physicians that I know who are associated with hospitals don't make much more than the top rank and file employees at my former employer. They certainly don't invest very much, they are raising families and paying for their children's education. They certainly don't have "fat bank balances."
September 14, 2022, 3:53 AM · Ann - from working in a neurological hospital I know full well that doctors aren't all rich, particularly in the UK. Even at senior consultant level few would make more than half the sum Lydia quotes. One junior doctor of my acquaintance owned a Stainer that could have been the real thing; I think he inherited it.
September 14, 2022, 1:58 PM · OMG!
September 14, 2022, 4:38 PM · Uh oh, sounds like we're screwed!
Matthew, do you have six months of food stashed away for when "helter-skelter" comes down? And guns and ammo to defend it from the desperate starving people who failed to plan?
September 14, 2022, 5:15 PM · Yeah, while think we are at risk, that didn't belong here.
Editing and removing.
Edited: September 14, 2022, 8:40 PM · I'll just point out that the average total compensation for a software engineer in Los Gatos, CA (where Netflix is headquartered), is over $500k. (Source: https://www.teamblind.com/blog/index.php/2022/02/16/best-paying-cities-software-engineer-developer-programmer-sf-bay-area/ )

And there are plenty of people who are in dual-professional tech-worker families. Entry-level Silicon Valley salaries now top $150k. (Buying a modest 1,500 sqft house might easily cost you $2 to $3 million, though.)

And this is why for bright students who have the choice between STEM careers and going into music, the opportunity cost is immense.

Edited: September 17, 2022, 2:26 AM ·
QUOTE: Matthew Metz · 9/11/2022, 12:29PM
"If the OP wants to be outraged you can look at the very real disparities in education in America."
----------
I don't know that the OP particularly wants to be outraged. In fact, after reading replies in this thread, I think that the OP's initial outrage may have subsided.

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