That is the key. Funds and individual investors routinely count paper profits in computing the return for a quarter, a year, etc. However, they don't have artificial and arbitrary restraints on their ability to sell. If I buy a stock at 30 this morning and it is now 31, I could sell and take the profit. So, if I choose not to I can properly use 31 to value the acoount at the end of the day (assuming a 31 close) knowing that I can sell Monday morning if I choose. But suppose I had a rule that I would not sell under any circumstances unless and until the stock hit at least 40. Can I really say I have a gain from 30 to 31 when I can't take it? The answer is "No" on any fair basis. The gain is ethereal because it cannot be taken and may never be able to be taken.