The number of existing rare stringed instruments from the 1700 is understandably finite.
Furthermore, museums, wealthy private collectors and big corporations often purchase the most valuable instruments. Many of these exquisite masterpieces end up behind a glass of a display case or in a vault, never to be played on again. As more and more instruments are purchased with no intention of resale by these institutions, the prices of remaining instruments are pushed further up.
From all the best stringed instruments ever made, the ones created by Antonio Stradivari and Giuseppe Guarneri del Gesù three centuries ago, are the most extraordinary and increase in value most dramatically.
The exact number of the remaining instruments made by Stradivari and Guarneri is not exactly known. Numerous instruments were destroyed during the many wars that swept throughout Europe, others disappeared under diverse circumstances, and further more instruments were either stolen or acquired under mysterious circumstances.
Supply / Demand
Worldwide demand for rare stringed instruments is growing but supply is very limited. There are only around 550 known violins, 14 violas and 60 cellos built by Antonio Stradivari and only around 135 violins and only one cello built by Guarneri del Gesù.
Large institutional buyers with no intention of resale buy more and more of the finest rare stringed instruments. That reduces the supply of the finest instruments coming into the market while the demand is continuously growing.
The competition for the remaining instruments increases and consequently the price of the available instruments is dramatically pushed up.
Most of the Stradivari instruments build after 1700 and Guarneri instruments made after 1730 are currently valued in the range of $2.500.000 to $8.000.000 depending on their condition, provenance and historical importance.
The rare stringed instruments perform best as middle term to long-term investments. Most investments in rare stringed instruments should be viewed as a ten-year investment.
Fine stringed instruments usually attract a buyer easily, however the market is not as fluid as the bond or the share market.
A fine instrument in the price range just under the top will typically sell within twelve months. However the top priced instruments are usually already sold before they can reach the market.
An unquestionable advantage of investment in rare stringed instruments is its low correlation with other financial assets and its diversifying effect on an investment portfolio. Despite the decline of many stock markets the value increase of rare stringed instruments has remained very stable.
The extremely low correlation with other asset classes has resulted in investments in rare stringed instrument becoming a highly beneficial investment vehicle that can provide unequivocal benefits for investment strategies.
From the portfolio management perspective, if an investment in rare stringed instruments is held in combination with stocks and bonds in a portfolio, then the investor is able to render higher than expected returns for a given level of risk.
Insurance, storage and maintenance cost
Even a passive real estate investment requires the payment of insurance, property taxes and maintenance and repair costs. Investments in stocks and bonds often require the payment of account maintenance fees. Investments in gold require storage, transportation and transfer costs. By contrast the investment in rare stringed instrument is free of these types of fees and expenses.
The cost for the instrument’s storage, maintenance and insurance is taken care of by the musician in exchange for the right to play. And Stradivari Invest® takes care of every aspect of the administration.
The instrument is covered by all-risk insurance by a foremost insurance company rated AAA by the Standard & Poor´s Rating Agency.
To retain the best insurance coverage possible the instrument will be re-evaluated every year and the insurance policy will be adjusted to reflect the most current value of the instrument.
Safeguarding against fraud
In all purchases of fine rare stringed instruments a great deal of money is involved. Therefore immense care must be taken to protect against fraud.
Our rigorous and uncompromising due diligence and certification process secures you only the finest genuine rare stringed instruments, eliminating all fakes and problematic instruments. That secures your investment and ensures the maximum increase in value.
Due diligence involves market intelligence, provenance checks, verification of instrument’s certificates, valuation and more.
© Stradivari Invest 2009