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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Realization is when you turn something into cash. Any increased in decrease in price before you sell the asset is unrealized.
So, for example, if you buy a house for $200k and next year you get it appraised for $300k, you have a $100k _unrealized_ gain – the house has gone up in value, but you don’t actually have any of that cash in hand.
If you then _sell_ the house for $300k, that $100k increase in value is realized – you now have the extra cold, hard cash in hand.
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