Showing posts from July, 2023

Halal Investment : Buy and Hold vs Dollar-cost averaging (DCA)

Once you find a halal stock to invest in for long term, you would want to take a look at long term strategies . we look at two prominent among them in minor detail Dollar-cost averaging (DCA) and buy and hold are both long-term investment strategies, but they differ in their approach to investing and their potential returns. Here's a comparison of the two strategies: Dollar-Cost Averaging (DCA): DCA involves investing a fixed amount of money at regular intervals, regardless of the stock's price. By consistently buying shares over time, DCA investors benefit from market fluctuations. When prices are low, their fixed investment amount buys more shares, and when prices are high, they buy fewer shares. Advantages of DCA: Reduces the impact of market volatility: DCA allows investors to smooth out the impact of market fluctuations by purchasing shares at different prices over time. Disciplined investing: It helps investors develop a regular investing habit, eliminating the need t

Halal Investment : Long Term

Long-term investing refers to holding investments, such as stocks, for an extended period, typically years or even decades, with the goal of maximizing returns over time. These strategies are based on the principle of capitalizing on the long-term growth potential of the market and taking advantage of compounding returns. Here are a few commonly used long-term investment strategies: Buy and Hold : This strategy involves selecting fundamentally strong companies and holding their stocks for an extended period. The idea is to benefit from the growth of the company and the overall market over time. Diversification : Diversifying your portfolio is crucial for long-term investing. By investing in a mix of stocks across different sectors and asset classes, you can spread your risk and reduce the impact of any individual investment's performance on your overall portfolio. Dollar-Cost Averaging : With this strategy, you invest a fixed amount of money at regular intervals (e.g., monthly) r

Halal Stock Investment : Day Trading

Day trading in Islam Day trading is not permissible in Islam because you do not yet have possession of the shares when you sell them. In Islam, it is not permissible to sell something before you have taken possession of it. There are two reasons why day trading is not permissible in Islam: The settlement date. In the United States, stocks have a two-day delay, known as the "settlement date" or "T+2." This means that it takes two days for the trade to be finalized and for the buyer to receive true ownership of the shares. Dividends. You are not entitled to dividends after the execution of the stocks. Rather, you are only entitled to the dividends after the settlement date. For example, if you buy 100 shares of ABC on Monday, the order will be executed on Monday. However, it will take two days after the day of purchase to be settled, which takes place on Wednesday. The seller will receive his payment, and the buyer's name will be recorded as a shareholder in

Investing in Stock Exchange : The Halal Way

There are three main types of companies in terms of how Shariah compliant they are: Shariah compliant business & Shariah compliant financials: These companies have a Shariah compliant business activity and no borrowings with interest. They are very difficult to find, but they offer a high level of Shariah compliance. Non-Shariah compliant business: These companies have a non-Shariah compliant business activity, such as the production of pork or alcohol. Investing in these companies is never Shariah compliant and should be avoided. Shariah compliant business & mixed financials: Many companies fall into this area where their business is Shariah compliant but they may have a small proportion of borrowings with interest or may have deposits in a business account in a conventional bank and thus receive interest. With the interconnectedness of the financial system, it is almost impossible to evade some exposure to non-Shariah compliant financial services. However, the majority o