If I asked you to guess an investment that can give you 500% appreciation of six months, what would it be?
I'll bet that guitars wouldn't be your first response.

In the forty years since Jimi Hendrix played his white Fender Stratocaster before a 500,000 people at Woodstock, guitars are now firmly established as collectible items.

Such legendary events have led thousands of enthusiasts to seek out vintage Fender Stratocasters from the 1970s.
A late '60s Strat', then worth a couple of hundred dollars, can today sell for as much as $30,000.
Other items, like a '60s Gibson Les Paul Jr., can appreciate by an incredible 500% after six months of ownership.

And the best news is, with the guitar market down alongside stock prices, there are plenty of opportunities for new investors.

"Now, the baby boomers that bought the guitars are selling them back," Harvey Moltz of Rainbow Guitars, an Arizona-based vintage and modern instrument dealership, told Forbes.

Guitar prices are dropping by as much as 40% - so dealers are stoking up their storage rooms with vintage guitars for the first time in 30 years.

There is one particular factor that can guarantee a guitar's appreciation...

Aside from being in mint condition (with original parts, electronics and paint), the guitars must be tied to an artist or event that resonates in the modern popular conscience.

For instance, 1980s ESP guitars were played by, and are associated with, Metallica.

While such guitars hold value now - particularly with today's wealthy who loved metal in their youth - the value of shred-friendly guitars is likely to fade as the collectors themselves age.

But Woodstock and other classic-rock-associated guitars are likely to increase in value yet again - partly due to music releases and merchandising from labels like Warner Bros to coincide with Woodstock's 40th anniversary.

But, even if prices are more affordable - with a '56 Gibson P-90 Les Paul Gold Top dropping from $80,000 in 2007 to as little as $35,000 - you should still be cautious with your cash.

The year of a guitar's manufacturing date can affect the value dramatically.
For instance, electric guitar production increased dramatically after the Beatles' 1965 North American tour. Guitars from this era are less rare, and therefore less valuable.

A scarce guitar is the black mid-'60s Gibson ES-345 played by Jefferson Airplane's Jorma Kaukonen at Woodstock. The model is a much rarer find due to its colour.

Many guitars can increase in value over time, but few instruments will exhibit the long-term value or prestige of Woodstock instruments, despite their current (relatively) low prices.

Here are some guitars to look out for....
Carlos Santana
Guitar: Pre-1965 Gibson SG Special with P-90 Pickups
What You Should Pay: $5,000-6,000
These guitars were the favoured choice of Santana and Pete Townshend even after Gibson phased it out in the '60s.

Stephen Stills
Guitar: Late-'50s Gretsch White Falcon
What You Should Pay: $30,000
This guitar has not been hit hard by the recession, and has the potential for future growth in value due to its connection to several star performers.

But avoid post-1967 models. Baldwin manufacturing bought the company from Fred Gretsch, and made poorer-quality guitars.
Jimi Hendrix
Guitar: 1968 Olympic White Fender Stratocaster w/all-maple neck and cap
What You Should Pay: $25,000-30,000

Don't buy just any '60s Strat, as not all have Hendrix's rare, all-maple neck, fingerboard and Olympic White paint. Non-Jimi models depreciate more due to generalisation of value.

To buy the Jimi Strat, you'll have to pay big, but your investment will be safe. The link between the instrument and Jimi is enough to keep this guitar - made after 1965 - appreciating in value.

For some people, selling goods at the Treasure Hunters Roadshow in Middletown has been music to their ears — particularly if the good was a guitar.
The Roadshow, which evaluates valuables and antiques, has been at the Manchester Inn since Tuesday; today, Oct. 24, is its last day.
Many items, even if they’re antiques, haven’t been fetching high prices in the weak economy, said Greg Taylor, a manager at the Middletown show. However, gold, silver and guitars are the exceptions.
“Gold and silver prices are so high, and with vintage guitars, the wood they used can’t be reproduced today,” Taylor said.
For example, earlier this week in Middletown, someone brought in a Gibson ES 330 from the early 1960s. It sold for $300 when it was new, but a collector bought it for $4,500, said Taylor.
Someone else brought in a gold coin from 1871 that had a face value of $20, but sold for $3,500.
The Treasure Hunters Roadshow looks somewhat similar to “Antiques Roadshow” on PBS, but experts there appraise items for insurance purposes, Taylor said. The Treasure Hunters Roadshow buys items for collectors and gives the sellers a check.
As of Friday afternoon, 312 people had visited the show since it started Tuesday. Taylor didn’t have local sales figures but said a typical week brings in $100,000 or more.
Kim Holt of Middletown came to sell off some coins and “did pretty well.”
A man from Springboro, who asked not to be identified, was trying to sell a Disney toy train set that he guessed dated from the 1940s or ’50s. He was offered $300 for it, but decided to try his luck on eBay, where the same set sold for $600.

Vintage Guitar magazine the market bible on all things Vintage Guitar, developed the "The 42-Guitar Index" in 1991. It tracks the ongoing values of excellent condition original pre-1970 Gibson, Fender and Martin guitars. Pre 70's because those instruments are the most valuable, however guitars from after 1970 are starting to rise steadily.

The average value of an instrument in their index for 2007 is a very healthy $19,706, and that represents a staggering 438% increase since 1991. This equates to an average of 27% compounded annually.

The bulk of that growth has occurred in the past few years. Last year alone showed an amazing 54% increase. Why the sudden and massive increase? Simple, stock is drying up and these instruments have gone underground in collections world wide.

There are three main brands of guitars that lead the pack in investing circles, Gibson, Fender and Martin, all American guitars. Gibson however leads the pack in the vintage guitar market and outranks all other vintage guitar brands in terms of increase in value over the past 20 years, slightly edging out Fender and far exceeding Martins.

As an example, an all original museum quality 1959 Gibson Les Paul Standard may soon fetch over US$500,000! This particular guitar made between 1958 to 1960 is not only rare, but is also one of the greatest sounding guitars of all time and has been used on many of the finest rock albums of all time.

Fender guitars, and in particular the custom colors models are still highly desirable instruments for both players and investors. If we take a 1962 Fiesta Red Slab Stratocaster from 1996 to 2007. In 1991 they sold for an average price of $10,650. Find one now and you will have to pay an average of $41,500 - this equates to a low of $29,000 and a high of $54,000.

Martin guitars have produced similar rises in value and make excellent investments as well, but the really big money is in the Fender and Gibson models.

Ever thought that a guitar might be a more reliable investment than the stock market? Vintage guitars are becoming a hot item in the collectibles market, and there are few icons more recognizable to Americans than a rock star and his guitar. While a few months' savings might have bought a guitar in the 1960s, some of those instruments are selling for big bucks today. Recently, George Harrison's guitar sold for a little under six hundred thousand dollars, for instance. Eric Clapton's favorite Stratocaster from the 1970s, Blackie, sold for nearly a million.

While celebrity collectibles have been a good investment for years, guitars themselves have largely been overlooked. However, the guitar was perfected between the 1930s and the 1960s, depending on the model, and instruments from this period are highly regarded. Some people think that in fifty to a hundred years, guitars from the mid 20th century will be thought of in the same way as violins and cellos from the 17th and 18th century.

The appeal of any guitar grows over time, and there hasn't yet been a period when the market sank. That makes a vintage guitar a great investment choice, as well as a visually and emotionally rewarding collectible.  There's nothing like being able to say that you own the guitar once played by a legend.

Values only continue to go up, too. While a 1959 Fender Sunburst Stratocaster, one of the most famous types of guitar, originally cost about $250, it brought between eight and nine thousand dollars in 1997. Today, you might have to pay seventeen thousand for a model with a slab fingerboard.

Recent stock market unpredictability has meant that people are more interested in guitar collecting. These vintage instruments are a great type of protected investment. For collectors who want to cover all the bases, consider a varied collection - acoustic, electric, exotic, antique, vintage, contemporary and even custom guitars.

What Defines A Vintage Guitar

To be a vintage guitar, an instrument needs to be more than just old. It should be from a period that was influential. Many good vintage guitars are made using techniques or materials that were discontinued, or made before a big change in the company.

For instance, Leo Fender, inventor of what we think of as an electric guitar, sold his company in 1965, a move which some think of as the death knell of Fender Musical Instruments. Fender Telecasters and Stratocasters made before this time are in enormous demand. Asking prices have risen into the five figure range.

It's not just Fender, either. C.F. Martin and Co. were the makers of the D-28, one of the most popular acoustic instruments ever. Since 1969, Brazilian rosewood hasn't been available as the standard wood. Guitars produced by Martin after this period are considered inferior by many collectors.

Top Vintage Brands

The American brands that stand out when it comes to collecting vintage guitars as an investment (and also as a great guitar) are Guild, Martin, Gibson, Gretsch, and Fender. Each of these manufacturers also has an era that collectors agree upon as having been the best. Of course, make isn't the only way you decide how much a guitar is worth. The rarity and condition of the guitar are important, as is who's owned the guitar and where it's been.

If you want a great investment that's also a piece of the past, look into vintage guitars. Collecting them can be rewarding in many ways, and it's a lot more stable than playing the stock market! A good place to begin your search would be Bob's Vintage Guitars where you will find a large selection of vintage guitars and amplifiers. There is also a great deal of information about collecting vintage guitars.