Finance Dictionary ( daily finance terms and concepts will be added and discussed)

Index Fund
A collective fund that attempts to replicate the movements and characteristics of the Index of a certain financial market. There are many methods of replication, like holding securities in the same proportion as the index.
 
Indicated Dividend
The total dividends that would be paid on a share of stock in the next twelve months, provided that each dividend is the same amount as the latest payment.
 
Indicated Yield
The yield that a share of stock would return based on its current Indicated Dividend, calculated by dividing the indicated dividend by the current share price
 
Individual Retirement Account
Abbreviated IRA. A retirement investing tool for employed individuals that allows for an annual contribution of 100% of earned income up to a maximum of $2,000. Some or all of the contribution may be deductible from current taxes, depending on the individual’s adjusted gross income and coverage by employer-sponsored qualified retirement plans. Withdrawals of tax deferred contributions are taxed as income, including the capital gains.
 
Industry
Category groupings for companies according to their business. These may vary somewhat according to the authority doing the grouping (e.g. Value Line, Standard & Poor’s, etc.). When looking for good investments, it is wise to compare several companies in the same industry and to pick the best of the group for purchase.
 
Inside Market
The highest bid and the lowest offer prices among all competing Market Makers in a NASDAQ security, i.e., the best bid and offer prices
 
Insider Information
Information about a company’s activities that has not been disclosed to the general public. It is illegal for anyone with access to such information to make trades based on it.
 
Insider Ownership
Employees, executives and directors who have their own money invested in the company are Insiders. By holding shares, they show that they have confidence in the security and future of their investment. They have extra incentive to make the company profitable. The percentage of insider ownership desirable is a judgment call. At 51% or more, the insiders definitely have the controlling interest.
 
Insider Trading
Illegal trading by anyone considered an insider who has access to non-public information, and who attempts to profit from that knowledge. If the information is used to illegally make a profit, there may be large fines and possible jail sentences.
 
Institutional Investor
A person or organization that trades securities in large enough share quantities or dollar amounts that it qualifies for preferential treatment and lower commissions. An institutional order can be of any size. Institutional investors are covered by fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves.
 
Institutional Ownership
The percentage of shares held by mutual funds, trust funds, and other professional managers who hold large blocks of shares for their clients. Fund managers tend to make changes in their portfolio of stocks more frequently and for different reasons than individual long-term investors do. These large sales can create larger than normal price changes. This is why a substantial percentage of institutional ownership may be considered a disadvantage.
 
Interest Coverage
The number of times all interest charges are earned by pre-tax, pre-interest earnings, typically at least 3 times. The formula is the Interest expense plus pre-tax income , and divide this sum by the interest expense.
 
Inventory Turnover
This ratio shows how many times the units of inventory of a company are sold and replaced during an accounting period. The ‘convention’ is to divide sales by the inventory. However, it is more realistic to divide the cost of goods sold by inventory.
 
Inverted Yield Curve
A chart showing long-term debt instruments having lower yields than short-term debt instruments. Also known as a Negative Yield Curve.
 
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