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Fatwa ID: | 22258 |
Title: | Islamic Investment questions |
Category: | Financial Transactions |
Scholar: | Dr. Main Khalid Al-Qudah |
Date: | 01/13/2007 |
Assalamu Alaykum Dr. Main, Insha`Allah this email finds you in the best of health and Iman.
1) Stocks: I used to think that the only Islamic criteria when it comes to picking stocks was to stay away from places with haram business such as financials, entertainment. But then there are places like Amana (and websites online) that say one needs to check things like the debt/asset ratio to make sure it is below a certain level, company income from interest to make sure it is below a certain level, and other things. In short, conditions that make a tricky process trickier. Which is the correct thing to check for, just the haram business or also the financial data? Especially keeping in mind the presence of companies like Amana that keep track of the halal stocks for you.
2) 401(k): What`s the rule about how to purify a 401(k)? Is it suppose to be done monthly, quarterly, yearly?
3) REITs: Are Real Estate Investment Trusts a halal form of investment? What guidelines, Islamically-speaking, do I need to follow to pick one?
4) I inherited a combination of bank stocks and interest-bearing checking accounts from my father back in
5) Do you know of any Islamic investment opportunities here in the
6) Stocks again: I`ve read of several different screens used to determine if a stock is halal or not, how do I figure out which is the most valid? Also, if a stock is deemed valid by the screen that I use, do I still need to purify the profits from it?
7) What is your opinion of the University Bank Islamic Savings and CDs products
http://www.university-bank.com/IslamicBanking/IBDmain.htm ? Is it halal for me to use?
Jazakum Allah Khair for your efforts.
W`Salam
Wa Alaykom Assalam
1-You need to consider the following regarding possessing socks:
A-Any guaranteed profit is not allowed; because this will convert the stock you have into an interest-bearing loan.
B- Possessing – or even transacting -with stocks of companies who conduct prohibited business, like obscene, alcoholic, tobacco, or gambling materials, … etc is prohibited too.
C- (Social responsible fund) companies – like Amana – might help you determining companies who conduct lawful (Halal) business.
2- It is a (zakatable) fund; after subtracting any penalty you might incur in a case of choosing to withdraw the amount before its due date (death, retirement age, or disability), the (net) amount is subject to Zakat, in which you deduct 2.5% as your Zakat.
3- I need more details about REIT to answer your question.
4- To be transferred to Fatwa Committee.
5- NO
6- As I said before, social responsible fund companies might help you in this regard.
7- I did not read their contract yet.