Through only 3% of the Australian population is Muslim, we are a growing group. We are shaping cultural touchstones to meet our own cultural needs and ethical standards. Though this extends to many facets of life, one of the most difficult to incorporate is typical financial services.
Are you looking for a way to invest your money that is ethical and compliant with Islamic precepts? If you’re going through regular financial agencies, you’ll have difficulty finding investment options that completely align with your investment goals and values.
That’s why Sharia-compliant investment options are growing. Invest halal with us at Crescent Wealth. Not only will you do good for your portfolio, but you’ll also do good for the world.
Where Are My Investments Going?
If you invest with a general investment company, you may not have ever thought to ask where your money was going. In fact, who would expect their investment advisor to put their cash into shady or immoral investment vehicles?
The unpleasant truth is that up to 40% of your investments could be going to businesses that you don’t agree with. These can include interest-earning financial services, alcohol, tobacco, gambling, weapons manufacture, pornography, and the pork industry.
To feel like you’re doing something right with your investments, you’ll need to pull them out of typical investment funds and look for compliant options instead.
Start with Your Heart, Follow with Your Head
It’s tempting when it comes to hard and fast numbers to want to analyze, control, and act upon facts and common advice. You’re not investing to make friends, after all, you’re investing to make money.
But you likely realize, from halal practices in other areas of your life, that these precepts are guided by old wisdom. It is applicable to everything, including investments.
When it comes to building out your portfolio, can you expect to make a fair and reasonable profit based on the murky, unstable world of haram investments? Do you believe that gambling, pornography, and weapons manufacture are profitable? Will they continue to be so in the future?
Your moral values lie in the truth that good things for society will continue to do more good. Hitching your wagon to that kind of horse provides the best shot at continuing to earn fair and square.
Riba, Gharar, and Avoiding Both
So what does halal investment prohibit? Two of the biggest topics that come up in halal investments are riba and gharar.
Riba is the practice of charging interest. This means Islamic investments will not delve into interest charging sectors, such as mortgages.
Shariah-compliant investments prohibit gharar, which is the type of uncertainty insurance companies profit off of.
It is essential for Islamic funds to eliminate both of these potential factors. As noted previously, there are a variety of haram markets into which typical investments go. By opting for funds that don’t cross these boundaries, funds can comply with Islamic precepts.
Do Halal Investments Perform Well?
You may feel frustrated when you consider withdrawing funds from your current account and seeking out a halal fund instead. Doesn’t this limit the options for investment?
Yes and no. Yes, there are fewer markets to invest in when opting for Shariah-compliant investments. And no, because the remaining markets tend to be more solid and rewarding in times of distress. You lose little opportunity is discarding unstable potential investments.
Success in Islamic investment was seen most recently in response to the COVID-19 pandemic. Previously during the 2008 recession, the Dow Jones was beat out by the Dow Jones Islamic Market by a staggering 15%. There is precedent to feel confident in Islamic investment opportunities.
How Do These Funds Remain Stable?
Concentration in sustainable markets has a positive effect on the stability of halal investing. Much of the 2008 financial recession came from poor mortgage investments and haram lending practices. Islamic funds faired better as they had not gotten involved in anything that charged interest.
Consider that many halal investments are tangible things. Whether they are a share of a business or ownership of a piece of land, they do not disappear with the whims of the stock market.
Feel confident about the limitation of Islamic funds. Don’t think of it as missed opportunities, but rather that halal ways to invest screen out some of the less dependable characters in the investment market.
How Do I Find Halal Investment Funds?
The great thing about halal investment funds—like Crescent Wealth—is that we’re proud of what we offer our clients and market ourselves as a Shariah-compliant investment option. Searching for halal investment funds should bring opportunities like us up.
If you are looking for other halal investment opportunities, reach out to others in your community who are interested in investing. Many have likely been finding workarounds for ethical investing for years.
They can point you in the direction of knowledgeable professionals or opportunities within your community that need investors.
Socially Responsible Investing for the Muslim Investor
If you listen to your average investment broker, they’ll tell you that you have to break a few eggs to make an omelette. They find it permissible to invest in socially irresponsible brackets to profit.
At Crescent Wealth, we don’t think this is true. In fact, we believe the opposite. The more you invest in upstanding, socially responsible investments, the better a profit you will make.
We opt for investment vehicles that do good for your portfolio. But they also do good for the world like healthcare, natural resources, and innovative industries.
With us, your investment portfolio is built on halal practices and principles. This ascertains all the stability halal investment practices can bring in the face of uncertainty in the market.
What Kind of Traditional Investments Are Shariah-Compliant?
If you are looking to build a traditional portfolio from funds that are Shariah-compliant, it is possible. Though it may take some due diligence or necessitate working with an Islamic super fund like Crescent Wealth.
Owning equity stocks in business which are not haram is considered halal investing. The businesses may incorporate some level of use of interest in their business practices. Yet as long as it is not their main objective most would consider this halal.
There are also mutual funds developed for Muslim investors. Look to the Financial Times Stock Exchange Group Global Islamic Index and the Dow Jones Islamic Market Index to see where passive funds profit.
More Halal Investment Ideas
Furthermore, you can expand your idea of investment outside of a portfolio that you must leave in someone else’s hands. While at Crescent Wealth we specialize in opting for investments that will meet your high moral standards, we also understand that you may be interested in diversifying further.
There are many ways to invest your funds in places that meet your standards, are socially responsible, and operate outside the stock market. Consider some of these when you are looking for a creative outlet for your investments and are still looking to make fair profits.
Sukuk
In sukuk investors put money in to gain something like a bond from a business. However, instead of making money off interest, they have a fixed-income rate which they will be repaid.
Investors interested in purchasing bonds from a particular organization should investigate whether a sukuk deal is possible.
Local Businesses
If there is a local business that you feel is halal, why not invest? Not only does your money go into your community, but you will also profit along with your community when the business performs well.
Find local businesses looking for investors in the Muslim community. You’ll be even more certain that your investments are going towards something you agree with.
Become a Landlord
Being a landlord is not quite the passive income most hope that it will be, but nevertheless, it is considered a sound investment option. Purchasing rental properties can put you in a great position to build steady profits over time.
When done correctly, you can even outsource property management. Use a company that deals with the day-to-day supervision of the property. Thus, this returns to passive investment income.
Hard Assets
Buying and selling hard assets like gold and silver is permissible under Islamic law. These are no longer considered a particularly profitable investment. However, precious metals do offer an alternative to stock investments.
Invest Halal with Crescent Wealth
If you are making the decision to transition your investments and finding out how to invest money halal, turn to Crescent Wealth. We make it possible to invest halal without hassle.
When you put your money where your mouth is, you’ll find both peace of mind as well as successful investment strategies. Halal investing allows you to do good for the world while you do good for yourself.
Reach out to begin halal investment with Crescent Wealth today.
