I’ve been looking for halal ways of investing my money for retirement and have recently learned about “Islamic investing”. One of the, if not the only, major firms I know of are “Wahed invest”. Dr.YasirQadhi not only sponsors them, but also has an account with them. Ironically, he states in a video that there is no such thing as having an investment that is 100% halal in todays time, including the Wahed account he has, and states that scholars have deemed it OK to have such accounts.
Before I start putting any money in this account, my questions is this:
Are these firms safe for us to put our money in? If not, how can we as Muslims safely invest our money for retirement purposes?
In the name of Allah, Most Compassionate, Most Merciful,
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
According to our research, Wahed Investments invest in shares/stock market. It is permissible to invest in shares/stock market with the following conditions:[i]
1) The main business of the company is not in violation of Shariah. Therefore, it is not permissible to acquire the shares of the companies providing financial services on interest, like conventional banks, insurance companies, or the companies involved in some other business not approved by the Shariah, such as the companies manufacturing, selling or offering liquors, pork, haram meat, or involved in gambling, night club activities etc.
2) If the main business of the companies is halal, like automobiles, textile, etc. but they deposit their surplus amounts in an interest-bearing account or borrow money on interest, the shareholder must express his disapproval against such dealings, preferably by raising his voice against such activities in the annual general meeting of the company.
3) If some income from interest-bearing accounts is included in the income of the company, the proportion of such income should be given in charity and must not be retained by him. For example, if 4% of the whole income of a company is accrued from interest-bearing deposits, then 4% of the dividend should be given in charity.
4) The shares of a company can be purchased only if the company owns some non-liquid assets. If all the assets of a company are in liquid form, i.e. in the form of money, then that cannot be purchased or sold, except on par value, because in this case the share represents money only and the money cannot be traded in except at par value.