How to Shop for a Fine Instrument or Bow

Entering into any market as an uninformed consumer can be a scary proposition. The string instrument business is no exception. The esoteric and arcane nature of the objects, the clubishness of the dealers, and the stories of fraud and deception in the business all combine to give the impression of peril waiting at every turn for the would-be buyer.

Say what you will about the string instrument business, it’s all true! But it is possible to understand and manage the downside risk involved in buying string instruments. By following certain guidelines, consumers can make informed decisions.

Be clear about your motivations before shopping. Ask yourself, “Do I really ‘need’ this?” The best reason for buying an expensive instrument or bow is because you will enjoy owning it. All other motivations pale by comparison to this, even the notion of career need.

Many would-be consumers of musical instruments form the idea that they should buy the most expensive instrument that they can possibly afford because they “need” such an instrument to forward their performing career and instruments are such a “good investment.”

More about string instruments as investment vehicles later, but before deciding to purchase an expensive instrument or bow consider this perspective: A good player usually sounds good on whatever instrument is played, a poor player sounds poor no matter what instrument is played.

Having said that, it is true that a fine instrument will greatly enhance a performer’s ability to project color and nuance. A fine instrument will have a good basic quality of sound. With the very greatest violins this effect can be transcendental.

But the esteem in which we hold a fabulous del Gesu or Stradivari, tonally, is tied as much to the superb artists who have made careers on these instruments as it is to the violins themselves. Still, it is a uniquely inspiring experience to behold and to play on a fine instrument or bow. That is why these objects continue to captivate collectors and musicians, driving prices for the most desirable examples ever higher.

Understanding the Risks…What Can Possibly Go Wrong?

Despite substantial inflation (and virtually no historical period of depreciation,) in the fine string instrument market, the marketplace is not without its risks. Risk factors in this market include the following:

  • Illiquidity

    String instruments and bows are highly illiquid. Liquidation of these objects at a retail level requires a period of years. Anyone spending a large sum on a fine musical instrument or bow should face the reality of the illiquidity issue up front. A good instrument or bow, appropriately priced, and in view of potential buyers will eventually sell. But in the fine arts market in general, there is no way to accurately predict when a given piece will sell to a retail consumer.

    If an owner needs money in the meantime, the price of achieving liquidity may bring the seller’s net to below 50% of the retail value. Consequently as with real estate it is difficult to buy and then sell an instrument or bow within a relatively short period of time and avoid losing money.

  • Effect of Commissions

    The fine string instrument market is largely made by the dealers who transact business in the market. It is normally necessary to pay commissions to these dealers in order to access the market. Such commissions can be substantial. Consequently, as with real estate it is difficult to buy and sell an instrument or bow within a relatively short period of time and avoid losing money.

  • Authenticity

    Problems of authenticity with a specific piece can affect the value and liquidity of that piece. Expertise in this area is to some extent, subjective. There are no absolutes with this problem but there is a whole range of risk. Generally it is better to avoid items around which there is likely to be controversy.

  • New Data

    Ongoing historical research periodically unveils information which negatively (and positively) affects the value of fine arts antiques. This has happened on a large scale with the paintings of Rembrandt, and on a smaller scale within the world fine string instruments. Further historical revelations should be expected. The effect of such revelations on the string instrument market in general, or on specific makers works is unknown, but it can be expected to diminish (or enhance) the value of specific pieces from time to time.

  • Inherent Vice

    Unforeseen problems of condition with a specific piece could affect overall appreciation and liquidity of that piece. Issues of inherent vice are specifically not covered by insurance so it is difficult to protect oneself from these issues.

What About the Upside…Is This Really a Good Investment?

The most honest answer to that question is no. Investment professionals would probably not recommend string instruments as investment vehicles. But some collectors and musicians have generated substantial passive gains in this market. String instruments do have some advantages over other investments:

  • Limited Supply

    The string instrument market has a built-in supply side limit. Some of these objects are rare antiques. The worldwide supply is a discrete pool.

  • Intrinsic Value

    Unlike stocks or bonds, string instruments have an intrinsic value which can be enjoyed on a daily basis. If you can’t play on, or at least enjoy looking at violins and bows, this factor is of no consequence to you.

  • Controlled Market

    Historically, the market has been small enough to be price-controlled by dealers and collectors. Thus, there has never been a period of depreciation in the market. In slow times the market has become extremely illiquid as owners of instruments and bows have waited for demand to increase. Those owners who cannot afford to wait for the market to generate demand, sell their positions to dealers and collectors who can afford to wait. As long as you never have to sell at any given time you are unlikely to experience depreciation in the market.

    As a small portion of an estate, which will never be relied upon for liquidity, fine string instruments and bows can serve as respectable investment vehicles, even after the effect of commissions is considered. But as pure investments, the risk to reward ratio with fine string instruments is such that there are probably better investment options out there.

Why Should I Pay Retail?

The former curator of the Metropolitan Museum of Art in New York, Thomas Hoving, has pointed out the three most common causes for disaster in the acquisition of fine art objects:
1.) Need 2.) Speed 3.) Greed

You should buy an instrument or bow because you want it, not because you need it.

Do not be pressured into a fast move. A week of playing on the piece in question should be enough time to know whether or not it is right for you. Even if you love it right away give yourself that week to get used to having the piece around. Less trial time may be risking near term disenchantment, and consequent financial loss due to the effect of commissions. More trial time needed often means that the piece is not right for the player.

Generally speaking consumers should buy an instrument or bow because they want to own it not because they want to make money on it. This doesn’t mean that one should pay no heed to underlying value, or investment potential, only that the main value is not usually achieved through a “below market” price. In fact accessing the real value in the market involves buying on quality, not price. This strategy tends to hold up well over both the long and the short term.

Before shopping for a fine string instrument you should consider whether you are shopping for solid value or a bargain. If you are shopping for a bargain you might do well to take a trip to Wall-Mart. Trying to second-guess the cogniscenti in the string instrument trade often backfires. If you are a retail consumer you will do well to accept the reality of your position; you need help and you should be prepared to pay for that help.

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