Marking to market

This is the process of updating a portfolio to reflect the latest available prices. So, for example, if you own 100 shares that were worth £250 in total last night, but when the London Stock Exchange closes tonight are priced at £2.70 each, you would mark up your portfolio by £20, since 100 x £2.70 = £270.

This is a straightforward process provided there is a readily available market price. Things get much trickier when there are few recent transactions on which to base a price, a problem encountered lately in the market for many subprime debt securities.

The alternative, ‘mark to model’ is contentious as in effect it lets the owner of a security value it using their own subjective assumptions about what it is worth.

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Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.