How to do Halal investing as a beginner?

how to do halal investing

Halal Investing is an investment term that complies with Shariah. Halal investment can also be seen as a type of socially responsible investment in modern language.

In accordance with Islam’s religious tenets, Shariah’s goal is to protect and maintain five areas: religion, life, intellect, and the family. A balanced ecosystem of social responsibility between society and the person is established using the doctrines and guidelines of Shariah.

Though it doesn’t prevent individuals to pursue their own interests, they should not ignore the interests of others as well. Shariah is designed to govern the equilibrium of the individual and social relationships.

The following are the six foundations for investing according to Shariah as Halal:

  • Sharing of profit
  • Prohibition of riba
  • Gambling prohibition
  • Investing in lawful activities only
  • Sticking to ethical and moral values each time
  • Successful and functional with the real economy

What are some Halal Investment options?

Four common investment options are available as Halal: stocks, companies, real estate, and cash.

Stocks

The most common type of investment by Islamic people are stocks – publicly traded shares of companies.

Pros: Investors have access to a wide range of sizes and types of companies. It is liquid, enabling investors to contribute and withdraw money in short periods of time.

Inconvenience: Stocks are considered a higher-risk investment as prices can vary considerably. Few stocks pay dividends that are generally at a rate well below the inflation rate.

Shariah compliance: Many Muslims purchase shares without knowing that the shares they buy may not conform to Shariah.

There must be significant time to check the Shariah compliance stock of each enterprise and to continuously monitor to ensure that shariah is being followed with the company in its practises.

 To explain this, 3 areas needed to ensure stock compliance have been identified by the Shariah Board of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

Type of Share

Shariah complies only with common stocks. The preferred shares are non-compliant, which are combined between debt and stock.

Business Activities

Less than 5% of total income shall be non-compliant activities. These include alcohol, gambling, tobacco, defence, interest income, conventional financial services.

Financial Screens

Debt, cash, and receivables of companies are generally restricted.

 

Cash

Cash isn’t an investment – however, many Muslims have cash because they don’t have the knowledge to invest in stocks, enterprises, or land. Consequently, they not only fail to grow their money over the long run but are also affected by annual savings losses of up to 2.5% as a result of inflation.

Real Estate

Real estate investment is one of the most wanted types of investment for Muslims, but many find it difficult to position themselves, owing to a lack of data or resources.

But don’t worry as here’s a bonus tip: Have you ever considered looking for opportunity investments in public properties such as amusement parks or other areas where recreational activities take place? Also, have you heard about halal investments in Calicut

Then it’s time to dream big because it’s now attainable in Kerala’s renowned Landmark entertainment city, which offers a plethora of investment options. It’s not just investments, but investments with excellent returns.

For institutional and private investors, they provide appealing investment portfolios and profitable collaboration opportunities. They are one of the firms to have as your best investment opportunities, Kerala because they have pledged to meet the needs of investors in the areas of tourism, entertainment, and pleasure.

Their headline project comes with a guaranteed rental income and a significant profit share. Investment in Kozhikode which is South India’s first mega entertainment destination… If you’re thinking about making a business investment, become one of their clients.

This entertainment city, as stated, is open to many opportunities for investment. It’s not just an investment, it’s an investment with incredible advantages. For institutional and private investors, they offer attractive investment portfolios and profitable partnership offers.

They are one of the top investors in Kerala, which has committed to satisfying the tourism, entertainment, and fun demands of investors. With secure rental income and considerable profit sharing, their project is strengthened.

Investing in South India’s Biggest Entertainment Destination can be considered as the best option for Islamic Banking. They follow all the principles and ethics of halal investments. They strictly adhere to ethical investment norms making the major goal of their firm to offer ethical and halal investment options.

Halal investing requires investment decisions to be made by Islamic principles. As a faith-based approach to investment management, investors often consider halal investing to be a sector of ethical or socially responsible investing.

What halal investments entail is two things; that the money invested is invested in something that does not cause any kind of social havoc and that there is no interest involved in any transaction.

When these two criteria are met, one can proceed to invest money wisely and efficiently and gain substantial returns. They always run a conscientious filter over all their investments. They take a long-term perspective and a highly disciplined attitude to wealth management and then provide a wide range of investment solutions for clients across the globe. 

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