Incentive Stock Option
Type of stock option that allows an employee to buy shares of an employer's stock at a pre-established price. If the shares are held for a longer period of time, the sales price will reflect a favorable tax treatment.
Index Funds
Mutual funds that attempt to mirror the composition and performance of a specific market index.
Indicator
A value usually derived from a stock's price or volume, which an investor can use to speculate on future price movements.
Individual Retirement Account (IRA)
A retirement account to which you may be able to contribute up to a specific annual amount (the maximum amount is determined by Congress). Individuals aged 50 and older may make additional annual catch-up contributions (up to a specified amount as set by Congress). IRAs give your money the potential to grow tax-deferred and, depending on your personal circumstances, contributions may be tax deductible (withdrawals prior to age 59½; may be assessed a 10% IRS penalty). Withdrawals from traditional IRAs are taxed at then-current rates. There are two types of IRAs: Traditional and Roth.
Industry
Grouping of companies in the same line of business. Industry groups are more specific to the business than Sector groups.
Inflation-Indexed Bond
Promissory note in which the principal adjusts with inflation, thus locking in a specific after-inflation return if held to maturity. "I-bonds" are backed by the United States government and are indexed semiannually to the Consumer Price Index (CPI).
Inflation Risk
The risk that the purchasing power of savings will decrease due to rising prices.
Initial Public Offering
First offering (start date) of common stock to the public. Commonly referred to as an IPO.
Interest Rate Risk
Most often associated with fixed-income investments, this is the risk that a security's price will fall when interest rates rise in the market.
Investment Risk
The potential for an investment's price or return to deviate from its expected price or return.
Irrevocable Life Insurance Trust
An irrevocable life insurance trust (ILIT) is a unique way to remove life insurance policy proceeds from your estate and pass them directly to your heirs. When properly executed, qualified assets in an ILIT pass along free of estate taxes. Consult a qualified legal professional for more information.
Irrevocable Trust
A legal arrangement that gives a trustee control over select assets and cannot be modified once it is established.