Unrealized Gains

Unrealized gains refer to the increase in value of an investment that has not yet been sold. For example, if you buy stocks for $100 and their current value rises to $150, you have an unrealized gain of $50. This gain isn’t realized until you sell the stocks, at which point it becomes an actual profit. Unrealized gains are important for understanding investment performance and potential worth, but they do not represent cash or income until the investment is sold. They can fluctuate based on market conditions until the sale occurs.