Is the VIPER strategy suitable for an IRA or other retirement account?
In our opinion, a volatility investment strategy is ideally suited for an IRA. The longer-term time horizon has proven very effective and the compounded (i.e. all gains reinvested) returns speak for themselves. Plus, following VIPER is easy, managing is easy and tracking is easy.
Historically, when VIPER trades it results in a gain
That translates to capital gains tax. However, those taxes on the gains are not incurred at the time the transaction takes place in a traditional IRA. This is another attractive characteristic of VIPER. As mentioned above, a common usage of the strategy we hear about is to compound all returns, which translates to re-employing all gains into the next Buy signal. That is how longer-term investors really unlock the power of the strategy.
The results speak for themselves
The “longer-term” returns, in our case since late 2011, show VIPER turning an initial $10k investment into +$240K as of this post! That is what we’re referring to when we say give your portfolio, or IRA, a booster shot.
Remember, you and only you can make these important decisions on how to employ the strategy and how much of an overall portfolio should be allocated. Please consult your tax advisor.