apr 10

Are violins good investments?

I’m of the mind that fine violins make poor investments, on average. But maybe for reasons that players don’t readily see.

A real asset is one where in the end, in real dollars, money has multiplied in your pocket from that particular investment.

That being the case, a violin purchase could actually be a liability, in the worst case, or on average, barely keep up with inflation.

Barring opportunity costs, and being generous to the counter argument (by yielding upkeep, repairs, adjustments, putting new strings on, etc., as costs associated with the profession, not the investment), here’s how violin investments fare on average.

If a violin is bought at USD 100k in 2000 and sold in 2020, just to beat inflation, you’d have to sell said instrument for greater than USD 150,220. (You can see where this number came from via this website.)

Fine violins, like the ones made in the golden-age of violin-making in Cremona, Italy, can be observed to appreciate in value, in real terms, at around 3.5% over a period of roughly thirty years. That may seem decent, but it doesn’t outperform the S&P over the same period.

The fact that the S&P, a class of investment long believed to be conservative and safe (but one that barely outpaces inflation) outperforms even the best-case violin investment, indicates the harsh reality that violins are a loser.

Now for the bad news…

The key to realizing why violins make terrible investments isn’t how little they appreciate, it’s the high transaction fees. The liquidity of the fine violin market is dismal.

When it’s time to sell, dealers, auctions and the like will charge a 15–50% fee to make your sale. So even if you are lucky and have a fiddle that appreciated 3.5% over a period of thirty years, you’ll be in rough shape after your broker/shop has taken its fee for selling it on your behalf.

What defines a good investment for a professional investor is subjective. But the writing should be on the wall for players buying a violin. Violins are relatively poor investments, and if you’re not careful, they could even be a liability for the unlucky ones out there.

This should come as a cold shower to those who have looked at fine violins with the notion that: ‘hey, they’re expensive, but at least they’re a good investment!’ Sadly, they are not good investments, unless you use them as a tax write-off or its certain to levitate your career.