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.

The new Jimi Hendrix album is probably the best of his posthumous releases. It contains twelve tracks of never-before-released tunes and alternate takes on previously-released material. The music has the feel of completion, far more so than his other posthumous albums like Cry of Love, War Heroes, and Loose Ends.

I heard one cut live in November of 1968 and later wondered why it had never made it onto an album: Sunshine of Your Love. It’s an instrumental version of Cream's best-selling song. The first thing you notice is the faster tempo; the second of course is Hendrix’s phenomenal guitar work. How he handles the piece differently from Eric Clapton is best summarized by Franz Joseph Haydn’s quote on W.A. Mozart: “People say I have genius, but Mozart stood miles above me.” After a minute, the piece slips into a rhythm guitar riff that charms with its subtly variations, then erupts into untethered virtuosity. Hendrix’s jaw-dropping musicianship reminds me of his guitar work in All Along the Watchtower.

Ships Passing Through the Night has also never been released before. The lyrics are nothing extraordinary, but the solo guitar riffs may send you back to the days of Electric Ladyland. Clocking at 5:52 it’s one of the longer cuts on the album and features wild perambulations. The title piece, Valleys of Neptune, melodic and furiously inventive yet still ragged, has never appeared in this full band version. Bleeding Heart differs from the version on War Heroes and contains solo guitar work and tight playing that should amaze anyone. Contained wildness. The longest track, Hear my Train A Comin, is the only full-band version of this 12-string acoustic song (from Jimi Hendrix:Blues). Blues is right. He even scats while playing. Listen close to the last minute, when the tempo mysteriously slows, the volume drops to a whisper, then bang! There’s a final shout and a stinging guitar coda. Another blues tune, Red House, contains expanded arrangements and shows that Hendrix had not only been listening to B.B. King, but had actually surpassed him. Like the recently released At Carnegie Hall (Thelonious Monk quartet) and My Dusty Road (Woody Guthrie), Valleys of Neptune is a welcome visit from beyond the grave. Who knows how many more are out there lurking in dusky catacombs?

TrackList:
1. Stone Free
2. Valleys of Neptune
3. Bleeding Heart
4. Hear My Train A Comin'
5. Mr. Bad Luck
6. Sunshine Of Your Love
7. Lover Man
8. Ships Passing Through The Night
9. Fire
10. Red House
11. Lullaby For The Summer
12. Crying Blue Rain

-- Peter Bates