I have been doing some research into investing for a while now, but couldn’t find anything halal until I found zoya. Now I would like to invest knowing that the companies that I am investing in are shariah compliant. If anyone could help me with starting up, that would much appreciated.
Have you considered ETFs? Or are you looking to spend considerably more time researching individual companies?
There are Halal alternatives to SP500. HLAL and SPUS in the US. There are few ETF in UK as well.
ETF is simply a diversified way of investing (typically). Do not fall for Sector ETFs as they do not give you the broad market diversification. (atleast initially).
Let us know what else we can help with
For a first dip in the markets, I would recommend ETFs (halal ones of course). You’ll stay in sync with the market at a reasonable cost compared to mutual funds, or worst: stock-picking yourself without knowledge, on whispered tips or on media talking-heads recommendations.
But I would most certainly recommend getting an education (nothing formal, there are plenty of books out there you can read: it is NOT rocket-science despite what can be portrayed). Once this step is achieved, start looking at sector ETFs for sector rotation, then the next logical step is picking individual stocks for yourself- by that time, you would have picked your school: investing on fundamentals or investing on technicals.
The path from broad market ETFs to individual stocks increases two parameters: risk and reward: you want to be aware of that.
Getting there won’t happen overnight (not a get-rich-quick-scheme…), but with time and effort, it will happen Insha’Allah.
Anyways: that’s how I would approach investing should I have to re-do it from scratch.
Hope this helps, and Allah knows best.
I was looking into things similar to ETFs I think like ISAs (IRAs) etc. I don’t want to have a large portfolio. Investing in S&P 500, I think it is called, which are safe and give a good return on investment. I do know that S&P 500 is haram?? I am located in the UK if that helps
If you’re in the UK, try these links below. In summary based on what you said, you probably want to use WahedInvest as a broker and to just pick a portfolio - dead simple and all halal. If you want to get into other more complicated things, that’s for later.
For new investors, either you pick stock or ETF, do dollar cost avg strategy, as it gives peace of mind due to volatility, especially during this time when stock market are at highest peaks, and usually pull downs will happen along the way, so putting altogether in 1 rather 2 this strategy, as it do two things 1- you are always in market and you dont have to time it.
Jazakallah Khair for the information
Jazakallah Khair for the information. Learning is the only way of knowing what you are getting into. I will surely be taking time out to learn
Jazakallah Khair for the information. I have started using another app called Freetrade which seem good. I will give WahedInvest a look. Thank you for sharing the links as well
Jazakallah Khair for the information. As I would like to invest in something which is low risk and requires less buying and selling, I will most definitely go for ETFs due to fact that they are probably more secure and give a good return
|SPRE||SP Funds S&P Global REIT Sharia ETF|
|SPUS||SP Funds S&P 500 Sharia Industry Exclusions ETF|
|SPSK||SP Funds Dow Jones Global Sukuk ETF|
|ADJEX||Azzad Ethical Fund|
|AMAGX||Amana Mutual Funds Trust Growth Fund Investor|
|AMANX||Amana Mutual Funds Trust Income Fund Investor|
|AMAPX||Amana Participation Fund Investor Shares|
|AMDWX||Amana Mutual Funds Trust Developing World Fund Investor|
|CLOU||Global X Cloud Computing ETF|
|IMANX||Iman Fund Class K|
some are with monthly dividend like SPRE, some are quaterly and some are yearly like Amana MF
Jazakallah Khair once again for the information. I had a look at the link that you had attached previously and DCA sounds quite good. I am soon going to be investing in ETFs but DCA sounds like another low risk investment. I am looking to invest for the future. Do you think these two methods are safe and give a good return.
DCA, or dollar-cost averaging, just means investing in increments rather than a lump sum in order to take advantage of price fluctuations. For example, you can either invest $1,000 into an ETF today or you can invest in $100 chunks every month for 10 months.
You have to ask question to your self, are you ok to take on short term volatilities if you invest all together or in chunks as picture above, as it has emotional aspect to it as well. E.g Today ZM dipped 15% in a day, if there is a correction at horizon of 5% for overall s&p, as 200 days we have not seen correction yet. will you be ok, than it is a choice. Also, enroll in DRIP - Dividend re-investment with your ETF’s so you can compound the stocks and grow.
I am doing this is a long term investment, so there will be some volatiliies involved during the time. I don’t want to lose the money I have invested over the long term. I will look into DRIP. Which app would you recommend for DRIP or ETFs etc.
In US All brokerages offer this from Robinhood to TD Ameritrade.
All are fine, as I have used Robinhood, M1Finance, Schwab, TDAmeritrade. As i usally use Laptop.
From Mobile APP perspective- Robinhood I beleive is easier to navigate.
but others has improved as well.
for DRIP on robinhood this is example: