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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When you invest your money in different assets like stocks, bonds, or mutual funds, the value of those investments can go up or down over time. The “Unrealized Gain/Loss” refers to the change in value of your investments from the time you bought them until the present moment.
If the value of your investments has gone up since you bought them, you have an “Unrealized Gain.” This means that if you were to sell those investments right now, you would make a profit based on the increase in their value.
On the other hand, if the value of your investments has gone down since you bought them, you have an “Unrealized Loss.” This means that if you were to sell those investments right now, you would make a loss based on the decrease in their value.
It’s important to note that these gains or losses are only “unrealized” because you haven’t sold the investments yet. They represent the potential profit or loss you could have if you were to sell them at the current value.
It’s quite common for investments to go up and down in value over time, so it’s important to monitor your unrealized gains or losses. They can give you an idea of how your investments are performing, but they don’t become “realized” until you actually sell them.
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