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Thursday, September 15, 2016

Stringed instruments: an alternative asset even for normal wage earners

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Bedburg, 15 September 2016 - a Stradivari for portfolio diversification? Anyone who believes such an alternative investment is only of interest to those millionaires with shares, pensions, holdings, property and too much spare cash is mistaken. Even "normal earners" can profitably invest in high-quality string instruments. They acquire a stable asset - and the opportunity to act as patron of the arts to those who play them.

Against a backdrop of persistently low interest rates, where traditionally safe investments are scarcely profitable, alternative objects of value are more in demand than ever. Red wine, vintage cars, oil paintings and also string instruments all belong to this asset class.

"Stradivari", the world's most famous luthier (violin maker) probably comes immediately to mind. His instruments are still in the hands of today's top musicians and continue to set the standard. They are traded on the international instrument market for sums in the millions. Often they carry exotic names - such as "Lady Inchiquin" or "Lady Blunt", and their owners - and performances - are documented over many years and decades.

"Such prominent instruments are usually owned by foundations, corporations, or very high net worth individuals", says Christian Reister. He is co-owner of VIOLIN ASSETS. The young company is located in Castle Bedburg near Cologne and specialises in the trade of high-quality string instruments. Usually they are not locked in armoured cabinets, but can be heard on loan to young or established musicians in the concert halls of the world.

However, one does not have to be a millionaire in order to have to a high-quality string instrument to call your own. "The prices for modern instruments that qualify as an investment start at approximately 30,000 euro", says Christian Reister, "Historical instruments as a capital investment make financial sense at values above 100,000 euro."

Monetary and moral yield

One of his clients has just acquired his second violin. It is in a price class of up to 50,000 euro. With these instruments, he fosters the talents of a young Taiwanese and a young German musician. "I get a lot of joy out of these investments," this client tells us, "because above and beyond the monetary appreciation they also bring me a wonderful idealistic return." His close contact to the scholars opens up a world of musical performances, mostly only open to an exclusive circle of supporters. "In addition I've found a new understanding of music, art and culture through my commitment", says the private patron.  

Historical and modern instruments

It doesn't have to be a Stradivarius. Instruments of other luthiers and from other eras are also suitable as an investment. Their characteristics: They make only six to eight instruments per year. The violins, violas and cellos have an individual and recognisable style. This quality is reflected in the development of their value. "However, you should note that the instrument market is not always liquid", says Christian Reister, "therefore we recommend this type of asset only to long-term-oriented investors."

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