We often get questions about why a CD or bond holding is showing it lost value on an account statement, when in fact the holding is whole and is not "under water". Most of the time, this discrepancy is due to an accounting entry called "mark-to-market". In short, this means that the "losses" shown occur when the financial instrument held are valued at the current market value. Good news: unless a person sells out of that position, the mark-to-market value doesn't really mean anything at all. Most of time if you hold on until maturity, you will collect the initial coupon plus interest owed.
March 20, 2023|