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If you're like me and fish all over the place for all kinds of different species, you might have run into this problem. I find something new that I'd like to try and then think: "hmmm, I'll need a new outfit for that". Then days or weeks of online research into what size rod, reel, line etc. will I need for this trip. It can add up fast, especially when you're antsy like I am. You're best off to plan out your gear purchases though and cover as many species and conditions as possible when you buy a rod. Some things you just need a specific size/weight for. Take salmon for example. You need a rod with a pretty good backbone to take on 20-30lb king salmon. Outside of saltwater fish and maybe pike/musky, there isn't really anything else you're going to use a salmon rod for.
That's the situation I'm faced with now. I'm looking for a salmon rod, but I probably wont use it more than a few times a year. So, do I spend a lot and buy a good setup? Or do I buy a cheap rig just to get me through? Whether it's the right decision or not, I usually go for the cheap route on setups that wont get used that often. I realize with warranties and other programs that the big manufacturers have that spending $600-$700 on a rod gives you a lot of insurance. If you break one of the good rods, for example, you can have it replaced. That's worth it in my opinion, but if you're only going to use a rod a few times a year, I could buy 6 or 7 Redington red fly 2's or 6 or 7 Orvis clearwater II's for the same amount of money. So I could break 6 rods and replace them for the cost of one of the big names.
I realize the rods are technologically superior to the cheaper rods, but in some situations, does it really matter? Take salmon for example. The type of salmon fishing I'm doing here on the east coast for salmon out of Lake Ontario, the typically outing involves chuck n duck style fishing, and the rod's flex index really means nothing. The most important thing in that situation is that the rod has backbone to help you land a big 30 pounder. Any rod in the 8wt range from any manufacturer is going to hold up under those conditions, so why spend a lot on a better rod?
Let's be honest, a lot of it has to do with bragging rights, and there's nothing wrong with that. Some people prefer to be seen with a Sage rod as opposed to a Redington rod. That's fine, but for me, it's all about catching fish and having a blast. If I can get that done with a $100 clearwater II, then so be it. If you need a Sage Z-Axis to have fun, then by all means, buy one! They're great rods! When to spend a lot, and when not, is more about whether you need that $700 rod for every situation. I say, spend a lot of money on a good rod for the rod you use the most. If you're typically hauling a 9' 5wt, buy a good 9' 5wt. If you're typically hauling big stuff or saltwater w/ 9wts, then buy a good one of those. IF you dabble in brook trout fishing, buy a cheap 3 or 4wt. Casting is irrelevant most of the time when fishing for native brook trout, so an expensive rod wont help you there. You're probably more likely to break a rod when fishing brookies too.
Point is, plan out your purchases. If you can buy a rod that will work in several situations and you'll use it a lot over the next several years, buy a good rod. If you're only planning on using it once or twice, and you don't mind "being seen" carrying a cheaper rod, buy a cheaper rod!