I just started an investment account and I have no idea what “Unrealized Gain/Loss” means. I’ve tried looking it up and asking friends but its just not clicking with me. Can anyone explain to me in the simplest terms possible with no jargon. Thanks!
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You have a band shirt. You bought for $20. This band recently went viral in Tik Tok video. Everyone wants their shirt. You can resell this shirt now for $100!
But you can’t take that shirt to McDonald’a and buy $100 in food. You don’t have $100. You haven’t realized the gains. You have the same amount of money as you started. But the shirt is worth more.
So you decide to sell the shirt to someone for $100 and go buy the buffet of nuggets you’ve been craving. You can do that since you’ve realized your gains.
Turns out the next week, a tweet from the bands lead singer comes out from 15 years ago using the n word. Everyone hates this band now. That $100 shirt is now worth $3. This person has lost no money because he hasn’t realized it.
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