Does Islam allow Muslims to invest in the stock market?
（Is it permissible for muslims to invest in the stock market or is that wrong because it’s kind of a gamble?）
Answer ：
Yes, Muslims are allowed to invest in the stock market as long as the companies are in compliance with Islamic rulings.
First of all, stock isn’t gambling to begin with 
Imagine that you own a business. If you were to divide that business up into small pieces and sell those pieces, you would essentially have issued stock. Quite simply, stock is ownership in a company.
The money you raise from selling those “pieces” of your business can be used to build new plants and facilities, pay down debt, or acquire another company. A smart owner will keep at least 51% of the stock, which will allow them to retain control of the day to day activities. Any person or institution that owns over a majority of the stock is called the “controlling shareholder”. Essentially, this person can do anything they want – right down to firing the CEO.
The Quran is explicit in its advocacy of all forms of legitimate commerce through dozens of verses, such as Chapter 2:275 which reads, “Allah has permitted trade…” As long as the companies operations and businesses comply with the Sharia (Islamic Guidelines), it is okay to buy their shares.
Similarly, financial investment is given relevance by the Prophet as can be seen, for instance, from the Hadith of Amru bin Shuaib related from his grandfather that the Messenger of Allah said: “Whoever is entrusted with the money of an orphan should trade with it and should not leave it sitting to be used up by zakat” (Tirmidhi).
The Messenger (PBUH) urged the trustee on the estate of people who due to age (or other reasons) cannot manage their own financial affairs, to invest it in a business that will yield a return and make it grow until they are in a position to do so themselves. For, if proper investment is not made with such funds, the same will be depleted by zakat (obligatory annual charity), thus leaving the orphan with little or nothing.
Allah knows best,
May Allah guide us all
Posted: August 1st, 2010 under US Stock Market.
Tags: invest in the stock market, Stock market