The magazine's 42-Guitar Index is based on the average estimated value of 42 of the most desirable collectable electric guitars in the mid-range category, 14 models each by the big three makers, Fender, Gibson and Martin. This rise in value indicates a 20 per cent growth over a 20-year period with the most dramatic increase happening in between 2006 and 2008, when prices virtually doubled. Prices have slowed a little in 2009 but not much.

Steve Jackson, owner of Jackson's Rare Guitars in Sydney, has been running his shop on Parramatta Road, Annandale, for 21years. Business has boomed over the past few years as more and more people see a vintage guitar as a collectable that looks good and will increase in value.

Fender Stratocasters and Gibson Les Pauls are the brands most in demand. This is pretty much the same market as those baby-boomers who buy the muscle car or vintage surfboard that they once couldn't afford, a reminder to themselves and the children that they, too, were young and wild. Jackson notes that if the demand for guitars is to be affected by the economic crisis, it hasn't filtered through yet.

The sharp increase in value of guitars has also come as a surprise to those who already own them. One of Jackson's clients bought in an old guitar that he'd been keeping under his bed. He'd had it insured some time ago for $10,000 and was amazed to be told it was worth about $400,000.

Guitars of this value are relatively scarce in Australia yet the feeling is that there must be a few more around somewhere. If you look at old photos of Australian bands of the 1960s and '70s it's common to see at least one member holding an instrument that would now be worth $50,000 or more.

The most valuable ones are those that have been kept in good original condition (and not smashed into an amplifier in a Pete Townshend moment). Minor signs of wear and tear - like the partial loss of varnish where the guitar rested on the hip - are seen as a bonus by most collectors. Anything that has been refinished (restored) using modern replica parts drops in value by about 50 per cent. You can change the strings but that's about it. Collectors says that vintage guitars, even electric ones, mellow in sound over time. A guitar in the original case is also seen as a bonus, especially if it contains the original manuals, spares and plectrums.

Les Paul was a noted jazz and country guitarist in the '40s and '50s who recorded many hit songs with his wife, Mary Ford, singing. These days he is remembered more for his work in developing the solid-body electric guitar that was marketed under his name by the Gibson guitar company. These were sold as the Les Paul "Gold Tops" in '57, then produced in the famous "Sunburst" design in '58 and '59. The exact year is important as the value snowballs according to the date of manufacture - a '57 Les Paul is worth $300,000, a '58 is worth $600,000 and a '59 will fetch about the $900,000 mark (all prices are for examples in very good condition).

If it's a '59 model with the ultra-rare Cherry Sunburst finish, congratulations, you're now holding a million dollars' worth of guitar.

This is the Holy Grail of guitars. One of these is featured on the cover of John Peden's book, Rare Guitar Museum, recommended reading for aspiring collectors. It's not thought that any Cherry Sunburst Les Pauls were sold here at the time.

Guitars of this rarity are best left for display only - trophies to be mounted on the walls next to your row of gold records. "You wouldn't take that to a pub gig," says Rob Belgiovane, a collector who prefers to play his instruments in the safety of his own home.

It's worth noting that hundreds of modern replicas of these originals have been marketed over the years. Some are very good instruments for playing but are unlikely to ever achieve the value of the originals. A selection of these were sold by Bonhams in March 2006, priced from $1500 to $10,000. As an example, a '69 Gibson Les Paul Gold Top was given an estimate of $6000 to $8000 in the catalogue. If only it had been made 10years earlier.

Also collectable are the National Resonator acoustic steel guitars from the '30s, as famously featured on the cover of Dire Straits' Brothers In Arms LP. These are still desirable guitars but their current market value of $8000 isn't expected to increase that much. The problem is that modern versions are now being made with better sound than the original.

My Collection

Rob Belgiovane, creative director at Sydney advertising agency Belgiovane Williams Mackay, began his musical career in Adelaide in the 1970s. His first guitar was a "firebird red" Maton, a cheap copy of a Fender. Now he has about 17 guitars, including a few genuine Fenders.

He developed his passion through meeting the legendary Jeff "Skunk" Baxter while in the US on business. Baxter is a former guitarist with Steely Dan and the Doobie Brothers. He took Belgiovane to vintage guitar shops and the ad man's collection began.

Belgiovane loves playing all his vintage guitars, though some are now too valuable to take out of home. Like many collectors, he prefers to play through an amplifier from a similar period. He was lucky enough to track down a Fender Twin Reverb amp he used in his first band in Adelaide. His cousin still had it after 30 years and when Belgiovane phoned him he was only a few days from getting rid of it.

$19,500

Not the fabled Stratocaster but this 1961 Fender Jazzmaster is still regarded as

a classic. The tremolo lever was a feature of guitars in the surf-music period.

$75,000

This 1955 Fender Telecaster is the rare ??????blonde?????? edition in exceptional condition. It has an interesting provenance. The former owner was Marilyn Manson guitarist J5

$295,000

Gibson Les Pauls are among the most desirable of all vintage guitars. This is a 1957 Gold Top model. You could double the value if it was a 1958 model, triple if it was 1959.