Is there anyone ready for halal investments?


#1

Yes anyone today whether its Muslims and nonmuslims are looking for better investment options to invest it, especially among millennials. Millennials want to know and be more engaged with what they are investing in. They are always looking for Ethical options and options that would help make the community a better place. Those options can also be including in Islamic investment however, there are a few rules and laws that need to be followed. Halal investment has been increasing and individuals are interested and are more aware of how it works. Halal investment is not only being used by Muslims but also nonmuslims.

With Islamic laws, it makes it easier for individuals to invest in markets that make a society. This goes for Muslims and non-muslims which means the stock market is trying to bring better options for their customers. Stock trading is halal, as long as those shares are of companies or constituents of the funds does not breach the principles of Shariah. Investments related to unethical or moral behaviors are Forbin in Islam. There are seven leverage industries in Islamic finance.

Those are:-

  • Financial services that feature transactions based on gambling, speculation and/or interest. Examples would include conventional banks, investment companies, insurance companies, and other financial institutions.
  • Certain food and beverages industries, most scholars agree that investing in tobacco, illegal drugs, alcohol, and other non-halal foods/beverages are prohibited.
  • Gambling; this means Islamic funds can not invest in online lotteries, casinos, lotto draws and betting transactions.
  • Some sectors in the Entertainment industry; those sharia prohibitions apply to adult entertainment products including videos, audio recordings, websites, magazines, etc. The same goes for certain types of non-Islamic music and cinema products.
  • Cloning; this decision is a fairly recent one. Islamic scholars must continually make decisions about the compliance state of new technologies and industries.

The type of contracts that are made also plays a big role in halal investments. Contracts that are made cannot be interest based nor preference shares. As preferences shares have some form of riba. Investment contracts must be based on profit and loss sharing, like in musharaka and mudaraba contracts.

Source: dummies