You\u2019re reading this because you want to start educating yourself and get started on your Islamic investment journey. You want to invest your money but are concerned about the Islamic permissibility of where you put your money.<\/p>\n
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Let\u2019s get you started in 4 painless steps.<\/p>\n
In this article, we\u2019ll discuss:<\/p>\n
We have a great article here<\/a> explaining what this means by Mufti Billal Omarjee.<\/p>\n Briefly, the key is that a halal investment is Islamically lawful or permissible<\/strong>.<\/p>\n Some of the principles to note include:<\/p>\n Before you put your hard-earned money to work, it\u2019s good to remind us why it is important to always make sure it is halal.<\/p>\n There are many places in both the Quran and Sunnah that emphases to us the importance of halal earnings.<\/p>\n The Quran says: \u201cEat of what is lawful and pure in the earth, and do not follow in Satan\u2019s steps.\u201d [2:168].<\/p>\n In a hadith, the Prophet \ufdfa said, \u201cEarning halal livelihood is binding (wajib<\/em>) on every Muslim.\u201d [Tabrani].<\/p>\n Again, more here<\/a> from Mufti Billal.<\/p>\n Now you understand what halal investment is and the importance of it, let\u2019s discuss the different options available.<\/p>\n Mohsin here<\/a> explains three golden rules<\/strong> when it comes to investing. Briefly:<\/p>\n Are you here for the long or short term? What is your risk appetite?<\/p>\n Answering these are important, as it will guide all future choices. For example, an appetite for higher risk would mean concentrating your investments into certain asset classes such as stocks and shares. On the other hand, a low-risk<\/strong> appetite may lean you towards gold or sukuk (Islamic bonds).<\/a><\/p>\n How quickly do you need to access your cash?<\/p>\n You temper your risk depending on goals, and how long you have.<\/p>\n Take\u00a0Day trading.<\/strong><\/a>\u00a0This is the fast food of the stock market. It\u2019s for those who are skilled enough to make a profit in a day. However, day trading is hard \u2013 it\u2019s not a get-rich-quick scheme. It requires a lot of education and practice.<\/p>\n Property<\/strong> is another example. This requires a huge amount of capital. If you\u2019re willing to wait, a crash in the market after purchase may not worry you as much. However, if you want to make a quick flip and it does crash, you\u2019ll be left exposed with your money tied into an asset that will make you a loss unless you hold onto it until things get better.<\/p>\n It\u2019s important to mix both assets and risk types so you\u2019re not left vulnerable to losses but also foregone returns.<\/p>\n For example, you could go very safe and leave your money in an Islamic savings account<\/a>\u00a0 \u2013 but then you lose out on the returns possible in other asset classes and probably lose money overall with inflation so high. But at the same time, putting your entire portfolio in stocks<\/a> is an aggressive approach only appropriate for some.<\/p>\n For a detailed explanation, check out our Halal investing 101 Guides<\/a><\/p>\n These investments listed below are ordered in order of risk<\/strong> \u2013 with fixed income being the lowest risk and high growth investments being the highest risk (generally).<\/p>\n We\u2019ll very briefly explain each of these below. But check out our Halal investing 101 Guides<\/a> for more of an in-depth explanation.<\/p>\n Fixed return investing is the\u00a0bread and butter of most mainstream investment portfolios<\/strong>\u00a0\u2013 but for Muslims, it is extremely difficult to find fixed income products.<\/p>\n The two options available are sukuk and property.<\/p>\n Read more in our Halal 101 fixed income guide<\/a>. <\/em><\/p>\n You may not be on the property ladder yet \u2013 but there are many ways anyone can access property today regardless of how much you have to start with.<\/p>\n There are 4 different property investment methods:<\/p>\n Read more in our Halal Property Investing 101 Guide<\/a>.<\/em><\/p>\n Stock investing is the bread and butter of pretty much any investment portfolio for a large part of your lifetime.<\/p>\n It is commonly regarded as the most preferred form of long-term investing.<\/p>\n There are 3 key ways to invest in stocks:<\/strong><\/p>\n You can check out individual halal funds to invest in via our\u00a0halal investment comparison page<\/a>.<\/p>\n Read more in our Halal Stock Investing Guide 101<\/a>.<\/em><\/p>\n Most portfolios should also have a little bit of exposure to high-risk, high-reward investments too. These types of investments add diversification to your portfolio as well as give exposure to high growth investments.<\/p>\n High-risk high-return investments are also often referred to as \u201calternative investments\u201d or \u201cgrowth investments\u201d or \u201chigh yield investments\u201d.<\/p>\n Assets in this category have two primary features:<\/p>\n Typically, these investments include:<\/p>\n You can\u2019t make money off the stock market from companies that are not sharia compliant. Apps like Zoya or Islamicly can help with this, however, they\u2019re always just a starting point. You need to check yourself<\/strong>.<\/p>\n You can learn how to find halal stocks which are halal by:<\/p>\n Read more in our High Risk High Reward Investments 101 Guide<\/a>. <\/em><\/p>\n As Muslims, we should always be conscious of where and how we invest our money. Do fully read our Halal investing 101 Guides<\/a> and try our Halal investment comparison tool<\/a> before you make your journey. From there you should be well equipped to at least make a start.<\/p>\n\n
Why is halal investment important?<\/h1>\n
Three Golden Rules<\/h1>\n
1.\u00a0\u00a0\u00a0 Know the reason for investing<\/h2>\n
2.\u00a0\u00a0\u00a0 Time<\/h2>\n
3.\u00a0\u00a0\u00a0 Everything in moderation<\/h2>\n
Investment Options<\/h1>\n
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1.\u00a0\u00a0\u00a0 Fixed Income<\/h2>\n
2.\u00a0\u00a0\u00a0 Property<\/h2>\n
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3.\u00a0\u00a0\u00a0 Stock<\/h2>\n
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4.\u00a0\u00a0\u00a0 High growth<\/h2>\n
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Conclusion<\/h1>\n