Investing in stocks and other equity investments that earn interest over time can be halal as long as the investment is. Under Islamic law, foreign exchange investments are considered halal. Stock trading is halal as long as the underlying companies engage in halal practices. For example, Muslim forex investors would not be able to participate in the trading of shares of gambling or alcoholic beverage companies.
It is generally accepted that buying shares is not haram. This is because you simply own a percentage in a business. However, you must ensure that the company in question is not operating in an anti-Islamic manner. Companies such as Guinness (alcohol) and Ladbrokes (gambling), for example, would not be allowed.
Shariah law requires that we only invest in fully halal companies. Among other things, this means that the company you are investing in needs to have a halal business model and not accept interest-based loans to finance its operations. The hard part is trying to figure out how which stocks in the conventional stock market meet these standards. Islamic investment policies begin with the Sharia Board, a group of Islamic professionals and academics who identify investment products and determine if they comply with Islamic law.
We will also explore different acts of investing that are haram, so that you can make a more informed decision about what investment behaviors are acceptable as a Muslim person. Therefore, if the stocks you choose are tied to a company in any of these industries, your shares will be halal. In other words, it's just another way to invest in a way that's good for the community, also known as socially responsible investing. It's easy, effective and reliable for investors who don't have time to research stocks in depth, but want to verify that the companies they invest in adhere to Islamic principles.
Many Muslims unknowingly invest their savings in super cancellations, IRAs, and bank accounts that violate Sharia investment principles. Investing in stocks of companies with very high debts (also known as “high leverage) is not allowed. Muslims are allowed to invest in stock markets if the company's shares are in accordance with Sharia principles. Both apps are available in free versions and will allow you to determine if a stock is a good halal investment in real time.
If this applies to a stock you are considering, there is a general rule that can be applied to check if the investment is still viable. Sharia scholars have set some standards for halal investments in shares of companies listed on the stock market. Both apps have free versions available and will allow you to instantly see if a stock is a suitable halal investment. Basically, a Muslim investment cannot invest in a company that produces things that go against Islamic law, such as pornography, alcohol, tobacco, gambling, insurance, etc.