VOO: Stay Forward-Compatible With The S&P 500

Core Insights - The Vanguard S&P 500 ETF (VOO) is highlighted as a strong investment option, particularly in light of rapid advancements in AI technology [1] - The long-term performance of a stock is closely tied to the underlying business's return on capital, with examples illustrating the impact of different capital returns over extended periods [1] - The effect of taxes on investment returns is emphasized, showing how tax treatment can significantly alter the effective annual return over long holding periods [1] Investment Analysis - A business that earns 6% on capital over 40 years will yield similar returns for investors, regardless of initial purchase price, while a business earning 18% over 20-30 years can provide substantial returns even at higher valuations [1] - The difference in effective returns due to tax implications is significant, with a 35% tax at the end of a 15% compounded return resulting in a 13.3% effective return, compared to a 9.75% return when taxes are paid annually [1] - The long-term holding of investments in strong companies can provide a considerable advantage due to the way income taxes are structured [1]