Wealth Solutions Are Boosting Brookfield Corporation

Core Insights - The long-term returns of a stock are closely tied to the underlying business's performance, with a business earning 6% on capital over 40 years yielding similar returns for investors, regardless of initial purchase price [1] - A business that earns 18% on capital over 20 to 30 years can still provide good returns even if purchased at a high price [1] - The impact of taxes on investment returns is significant, with a 35% tax on a 15% annual return reducing the effective return to 9.75% if taxes are paid annually, compared to a 13.3% return if taxes are paid only at the end of the investment period [1] Tax Implications - The difference in effective returns due to tax treatment can be over 3.5%, which has a substantial effect over long holding periods like 30 years [1] - Holding investments in great companies for extended periods can provide a significant advantage due to the way income taxes are structured [1]