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In the Name of God بسم الله
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Galvanized Love

Anyone experienced investing in the stock market?

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Salam Alykom All,

I have lately been reading many non-fiction books about investing in stock markets. I am aware of many type of equities like stocks, etfs, index funds, etc. According to my reading, I think investing in bonds should be prohibited as it is clearly lending money with interest. I personally don't see an issue with buying stocks of some technological companies. Has anyone experienced entering the stock market? What is your selectivity when you take into consideration that it is haram to buy stocks of companies that, for example, sell beverages, weapons, or lend money with interest?

I have also found some topics online about sharia compliant stocks: https://www.investopedia.com/terms/s/shariah-compliant-funds.asp

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On 6/13/2019 at 5:30 PM, Galvanized Love said:

I personally don't see an issue with buying stocks of some technological companies. Has anyone experienced entering the stock market? What is your selectivity when you take into consideration that it is haram to buy stocks of companies that, for example, sell beverages, weapons, or lend money with interest?

When you buy stocks you pay money to take part ownership of the venture.

In the modern day this may be looking at the situation through rose-tinted glasses, but that is the theory anyway. It's rose-tinted because although you are the 'owner' there are many other snouts in the gravy train before yours.

The company's directors', their financial advisors, their investment banks and a generally assorted group of people 'in the know', will likely know more about the business and its future prospects than you do.

In summary it is not a level playing field and the odds are stacked against you. But they can also be stacked against you if you invest via a pension fund, which is the reality for most of us.

That's just a description of the system and it's one to be aware of before you jump in. And it does not make the actual investment haram or halal (In my humble opinion). There is however an issue about the business that you are investing in and I think as an owner the same criteria apply as they would if it was an investment in a business you owned directly. So just as you would not raise pigs to sell so also buying stocks of a pig farmer would be problematic.

Technology is an interesting one because it can be culture-neutral e.g. the same streaming tech that can be used for good programmes can be used for bad ones. That's in the hands of the final customer, and I don't think that the developers of the tech can be held fully accountable for that end use. 

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Alcohol, tobacco, pork-products, gambling, pornography, interest-based financial services, weapons of mass destruction etc

Apple is tech company and it seems now it turned to be haram because they made loan system where they take riba from people.

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On 7/1/2019 at 11:55 PM, hasanhh said:

When you are guessing and hoping.

I wonder if you analyse the charts and check the company reports and then make decision to buy them, having a particular percentages of probability that the stock will go up, will it be gambling?

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2 hours ago, Abu Nur said:

I wonder if you analyse the charts and check the company reports and then make decision to buy them, having a particular percentages of probability that the stock will go up, will it be gambling?

You will then -by doing this- only reading make-them-look-good stuff.

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@Galvanized Love

Galv:  Wed14August19 selloff of 800 points reflects an "excuse to sell". Germany's industrial contraction y.o.y. of 0.1% is likely accounted for in currency fluctuations. 

The "inverted yield curve" is a post-WW2 observation that when short-term bond yields are higher than long term --the 2yr vs. 30yr. This has "predicted" ~8 of the last 11 recessions since then --but not before WW2 with any reliability. It all comes from the combing of economic data to find some kind of insight. It is an observation and not a calculation.

This morning, 15Aug19, the 2yr yield is 1.56%, and the 30yr has hit an all time record low of 1.97%. So despite the hype-of-ignorance (of the can't read kind) by the media and talking-heads, the yield curve is not inverted. Bond buying has become a hazard.

This day's pre-market trading is up. These indexes are based on option pricing and not actual trades. The idea here is to get people to buy-on-the-dips before another sell-off. The insider's reason? Go bear and make money until the next organized rally.

A significant problem is you have too many people and funds throwing money at about everything.

Edited by hasanhh

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