Vintage Guitar magazine’s guitar index, which tracks the value of 42 classic guitars, grew by an average 12 percent a year between 1991 and 2006, besting the S&P 500’s 9.5 percent average over the same period.

But George Gruhn, the Nashville dealer who sold Eric Clapton his first Stratocaster, says Vintage Guitar’s figures create hype by tracking only the most-sought-after guitars. They ignore the instruments that are running out of steam—those that are not archetypes or truly original. In other words, the vast majority of the guitars people buy.

One guitar that has epitomized the run-up of the past few years is the coveted 1959 Gibson Les Paul Standard, which was discontinued in 1960. As recently as 1997, the guitar model was valued at $33,000; last year, one sold for $300,000; and Stan Jay, a leading dealer from Staten Island, New York, projects it could be worth $400,000 in 2008.

But that guitar will continue to increase in value, in Gruhn’s estimation, because it has perfect sound, electronics, and design. “That guitar is a highly evolved guitar,” he says.

One of Gruhn’s clients, Jeff Bronchick, a chartered financial analyst who manages a $4 billion investment fund in Los Angeles, likens the vintage-guitar market to real estate. The true gems are like scarce property on Manhattan’s Central Park West or beachfront homes in Malibu—in the world of guitars, that equates to acoustics by Martin from the ’30s and ’40s and electrics by Gibson and Fender from the 1950s. But someone who bought a less rare, if high-quality, vintage guitar hoping to ride the wave could be sitting on something that is more vulnerable to a market correction.

For example, Fender Stratocasters, quality guitars by any standard, fared poorly at both the Christie’s and the Skinner auctions. “We had too much similar stuff,” says David Bonsey, who organized Skinner’s sale. And Keane asserted that next April’s auction at Christie’s would not likely feature any Strats.

In contrast, the rare, pristine 1959 Les Paul Custom electric fetched $85,000 after generating one of the Christie’s auction’s few bidding wars, while the Nocaster went for $61,000.

The vintage-guitar market’s ride since last year has led dealers and collectors alike to warn that it is not the path to riches some believe it to be.

Jon Kellerman, author of the bestselling “Alex Delaware” mystery series, has a collection of 125 rare guitars at his Los Angeles home. He keeps them in a 700-square-foot climate-controlled room protected by guard dogs. The 57-year-old, a proficient player with a jones for rare Martin acoustics, says he is motivated by “a search for the best sound.” Though his guitars have appreciated significantly over the years, he has no intention of selling them. “It’s vulgar to look at them as an investment,” he says.

Bronchick, who is building a recording studio in his backyard and regularly plays with local bands, has 30 vintage electrics, including a beloved sunburst 1959 Gibson ES-335. He sees dark clouds hanging over the vintage-guitar market. “Something that has appreciated eightfold is not a bargain,” he says. His advice: “Take 90 percent of your money, put it into a diversified portfolio, intelligently, and take the other 10 percent for vintage guitars if you love them.”

As for Keane, if another 1959 Les Paul Custom walks in the door, he says, he’ll definitely take it on. But he’ll be more conservative as he plans Christie’s next auction. “People should have more realistic expectations about the market—we do.”