Da frage ich mich als Kleinanleger, was die beste Strategie für die nächsten Monate ist, das eigene Vermögen zu sichern. Raus aus den Aktien? Oder wie jetzt?

Aktien verkaufen oder Krise aussitzen?

Da generell gilt, dass Aktienanlagen langfristige Anlagen sein sollten, sollten Anleger, die derzeit in Aktien investiert sind, mit 2 bis 3 Jahren rechnen, bevor das Investment sich wieder rentiert. Ein ausgewogen strukturiertes Anlageportfolio mit Aktien, Anleihen, Fonds muss nicht unbedingt verändert werden. Renditeberechnungen bei Anlagen basieren immer auf einer Mischkalkulation: ein Teil macht sensationelle Rendite, ein Teil macht Verlust, der Rest ist irgendwo mittendrin. Wer dagegen sein Geld so lange nicht entbehren kann, steigt besser jetzt aus.

Jetzt einsteigen bei den günstigen Kursen?

Es lässt sich derzeit schwer sagen, ob der Boden schon erreicht ist, oder ob noch mit weiteren Kursverlusten zu rechnen ist. Die Märkte sind unruhig, mal 2% runter an einem Tag, mal 1,5% rauf am nächsten. Die Experten der Banken schwanken zwischen der Empfehlung, für mittel- bis langfristige Engagements jetzt einzusteigen oder noch bis nach dem Sommer abzuwarten. Wer risikobewusst ist und einsteigen möchte, sollte das auf jeden Fall in mehreren über das Jahr verteilten Beträgen schrittweise tun.

Fondssparplan stoppen?

Frank Bock, Sprecher des Bundesverbandes Deutscher Investment-Gesellschaften, empfiehlt langfristig orientierten Fondssparern derzeit, ihre Sparpläne weiterzuführen. Der Grund dafür ist der so genannte Cost-Average Effekt: „Wenn Anleger monatlich feste Beträge in Investmentfonds anlegen, bekommen sie in Zeiten sinkender Kurse mehr Anteile für ihre feste Rate.“ Damit vergünstigt sich bei fallenden Kursen automatisch der Einstiegskurs, wenn weiter gekauft wird. Wer gerade jetzt mit dem Sparen aufhört, bringt sich selbst genau um diesen Effekt. Zwischenzeitliche Kursverluste sind bei Fondssparplänen kein Problem. Wichtiger ist es, wie die Kurse zum Ende der Laufzeit stehen. Bei niedrigen Kursen lohnt es dann meist, die Laufzeit zu verlängern, bis die Kurse besser stehen, weil das die Gesamtrendite deutlich verbessern kann.

Was ist mit Riester Fondssparplänen?

Für Riester Fondssparpläne gilt im Prinzip das gleiche wie zuvor gesagt, mit einer Ergänzung: Die Riester Verträge enthalten normalerweise eine Kapitalgarantie. Das bedeutet, dass zum Ende der Laufzeit immer 100% der Einzahlungen und Zulagen ausgezahlt werden müssen. Dies gilt allerdings nicht bei vorzeitiger Kündigung. Ein Grund mehr, Riester-Verträge auf jeden Fall laufen zu lassen.

Und was gibt es für krisenfeste Anlageformen?

Rendite und Risiko verhalten sich typischerweise umgekehrt proportional. Demnach sind jetzt genau die renditeärmeren Produkte gefragt, beispielsweise Festgeld oder Tagesgeld: Die Zinsen für diese Anlagen stehen im Voraus fest und können jeweils erst zum Ende eines vereinbarten Anlagezeitraums angepasst werden. Aktuell sind derzeit bis zu 5% zu holen. Wichtig ist jedoch, dass die Bank, bei der man sein Geld anlegt, dem Einlagensicherungsfonds des deutschen Bankgewerbes angehört – dann ist das angelegte Geld auch bei einer Pleite der Bank geschützt.
Für die Sicherheit von Bundesschatzbriefen und anderen Bundeswertpapieren garantiert der deutsche Staat, aber diese Sicherheit wird mit entsprechend niedrigen Renditen von derzeit 3% bis 3,5% erkauft.
Eine weitere Alternative sind Anleihen von Banken oder Unternehmen.

Wie sicher sind Rentenfonds?

Rentenfonds investieren in verschiedene der oben genannten festverzinslichen Anlageformen und diversifizieren damit das Risiko, allerdings berechnen Fondsgesellschaften auch Verwaltungsgebühren. Der Verlust des eingesetzten Kapitals ist bei Rentenfonds sehr unwahrscheinlich, solange der Fonds auf Qualitätsanleihen mit guten Ratings setzt. In Zeiten sinkender Zinsen – wie jetzt gerade – profitieren Rentenfonds, denn sinkende Zinsen bedeuten steigende Kurse für Anleihen, die bereits am Markt sind, weil sie für Anleger attraktiver werden als neue, niedriger verzinste Papiere. Damit sind Rentenfonds eine gute Möglichkeit, das Anlageportfolio zu diversifizieren.

Sind Kapitallebensversicherungen sicher?

Die Kapitallebensversicherung gilt als der Inbegriff von Sicherheit, stellt aber leider keine wirklich gute Kapitalanlageform dar. Die Rendite beruht zum großen Teil auf der Überschussbeteiligung des Versicherers, deren Höhe jedes Jahr neu aufgrund der erzielten Renditen aus dem Anlagegeschick der Versicherungsgesellschaft bestimmt wird. Die beim Abschluss genannten Ablaufbeträge sind im Normalfall reine Schätzungen – die zumindest bei meinen Verträgen Jahr für Jahr nach unten korrigiert wurden. Denn die durchschnittliche Gesamtverzinsung ist in den letzten Jahren von 7% auf um die 4% gesunken, der Garantiezins liegt inzwischen sogar meist unter 3%. Nach den jüngsten Zinssenkungen in den USA muss damit gerechnet werden, dass die Lebensversicherer noch geringere Renditen einfahren – die dann entsprechend auf die Verträge durchschlagen. Ein gesetzlicher Sicherungsfonds sorgt allerdings dafür, dass selbst bei der Pleite einer Lebensversicherungsgesellschaft die Leistungen aus dem Vertrag gesichert sind.

Mit Garantiezertifikaten auf der sicheren Seite?

Im Prinzip können Anleger mit Garantiezertifikaten an der positiven Entwicklung auf dem Aktienmarkt teilnehmen ohne das Risiko eines Kapitalverlusts einzugehen. Das klingt, als bekomme man da das beste aus beiden Welten. In der Praxis jedoch wird die Risikominimierung mit einer Renditeminimierung bezahlt. FINANZtest hat kürzlich einige Garantiezertifikate getestet – mit ernüchterndem Ergebnis: “Nur ein Produkt bietet Anlegern faire Gewinnchancen.”

Jetzt noch in Gold einsteigen?

Gold gilt als die Krisenwährung schlechthin. Daher hat sich im vergangenen halben Jahr das Interesse der Anleger darauf konzentriert, der Goldpreis ist um über 50 Prozent gestiegen und hat inzwischen die 1000 Dollar Marke überschritten. Denn Gold ist ein solider Sachwert und damit inflationssicher. Vermögensberater empfehlen, etwa 10 Prozent des Vermögens in Gold zu investieren, als sicherheitsorientierte Beimischung zum Portfolio. Hohe Renditen sind aufgrund des bereits sehr hohen Niveaus dagegen jetzt nicht mehr zu erwarten, eher muss mit einem leichten Sinken des Preises gerechnet werden. Eventuell sind andere Rohstoffe vorzuziehen, am besten in Form von ausgewogenen Rohstoff-Indexfonds, den hier sorgt das Verhältnis von Angebot und Nachfrage weiterhin für steigende Preise, und die Inflation wirkt sich sogar positiv auf die Rendite aus.

Und Betongold, sprich Immobilien?

Aufgrund der niedrigen Zinsen kann sich die Investition in Immobilien durchaus lohnen. Es ist eher nicht zu erwarten, dass die Immobilienkrise in den USA auf den deutschen Markt durchschlägt, da in Deutschland der Immobilienmarkt wesentlich weniger spekulativ ist und Kredite deutlich strikter vergeben wurden und werden als in den USA. Die Immobilie zur Selbstnutzung wird damit voraussichtlich wertstabil bleiben. Für Immobilien als reine Geldanlage gilt dagegen noch mehr als immer schon die Binsenweisheit von den drei wichtigsten Kriterien beim Immobilienkauf: Lage, Lage, und Lage. Interessant mit potentieller Wertsteigerung sind höchstens Immobilien in guter Lage in Ballungsräumen. In wirtschaftsschwachen oder ländlichen Regionen ist damit kein Geschäft zu machen.

Wie setzt man Verluste von der Steuer ab?

Spekulationsverluste können mit Spekulationsgewinnen verrechnet werden – aber nicht mit Zinsgewinnen oder anderen Einkommensarten. Das Finanzamt betrachtet zudem Kursverluste nur dann als verrechenbare Spekulationsverluste, wenn diese innerhalb der “Spekulationsfrist” von 12 Monaten nach dem Kauf durch Verkauf auch wirklich realisiert wurden. Die Daten sind in der Anlage SO der Einkommensteuererklärung anzugeben, wenn sie nicht direkt bei der Bank verrechnet wurden, sofern sie in einem einzelnen Depot angefallen sind.

Fazit

Auch in der Krise gibt es viele Optionen, und nach wie vor ist eine Strategie am wichtigsten: “Nicht alle Eier in einen Korb legen”, also diversifizieren. Langfristig fährt derjenige am besten, der ein ausgewogenes Portfolio besitzt mit einer Mischung aus sicheren, aber niedrig verzinsten Anlagen, deutschen, internationalen und Schwellenländer-Fonds, Rohstoffen und Immobilien. Wessen Vermögen für diese Art der Diversifikation (noch) nicht ausreicht, der sollte nach dem Aufbau einer Liquiditätsreserve zunächst mit möglichst breit investierenden Aktienfonds einsteigen. Aktien-Einzeltitel sind für den Beginn des Vermögensaufbaus denkbar ungeeignet, selbst wen es sich um vermeintlich “todsichere Tipps” handelt – denn das Risiko, alles auf ein einzelnes Unternehmen zu setzen, ist ungleich höher, als sein Geld auf mehrere Unternehmen oder eine ganze Region zu setzen, indem man Aktienfonds kauft.

2. Spot the Trend and Go With It
Determine the trend and follow it. Market trends come in many sizes — long-term, intermediate-term and short-term. First, determine which one you’re going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you’re trading the intermediate trend, use daily and weekly charts. If you’re day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term chart for timing.

3. Find the Low and High of It
Find support and resistance levels. The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old “high” becomes the new “low.” In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies — the old “low” can become the new “high.”

4. Know How Far to Backtrack
Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pullback in an uptrend, therefore, initial buy points are in the 33-38% retracement area.

5. Draw the Line
Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.

6. Follow that Average
Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4- and 9-day moving averages, 9- and 18-day, 5- and 20-day. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.

7. Learn the Turns
Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Most traders use 14-days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. These tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.

8. Know the Warning Signs
Trade MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It’s called a “histogram” because vertical bars are used to show the difference between the two lines on the chart.

9. Trend or Not a Trend
Use ADX. The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.

10. Know the Confirming Signs
Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It’s important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirms that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.

Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.

When Azra Kaiser wakes up every morning, she assumes the role of a regular housewife with regular household chores — cook food, pack lunch boxes, see husband and kids off (to work and school respectively) and get the house tidied up. Come 10 am, when the stock market opens, she is either on the computer or talking on the phone or checking the television channel, CNBC. The demure housewife is transformed into an aggressive stock trader. Once trading shuts for the day (3.30 pm), the transformation from a trader to a housewife is instant. She prepares a snack for her kids who return from school, sits with them while they do their homework and then prepares dinner.

Later in the night, she will tell her husband how much she made (or lost).Welcome to a world where housewives are fast stepping into the trading ring. The new breed

“Selling stock short is as follows: selling at the current price and borrowing the stock from the broker on interest. Stocks are delivered to the buyer at the time of the contract. At a later time, on the due date, stock is bought from the market and delivered to the broker in return for the previous loan.

Obviously, this transaction is interest-based. The fact is that goods are not sold for future delivery, but are actually being sold that day and are being delivered (as borrowed from the broker) and then bought while still in the same condition, on the due date so as to repay the loan. The reason for its prohibition is obvious: it is interest based.

What is meant by selling other equities short? For instance, it is permissible to sell cars, corn and soft drinks while specifying delivery at a future time and place with cash payment at the time of the contract. In Islamic fiqh this is called “salam”, and it is permissible.” 
 

The Members of the Council discussed the topic of stock markets (bourse) and the applications practiced in them, and dealing with the shares of stock companies and listened to the Shar`i as well as the economic studies submitted by some of the members and the discussions made about them. The Council then decided the following:

The European Council for Fatwa and Research (ECFR) confirms decision (7/1) 63 taken by the International Islamic Fiqh Academy concerning stock markets, adding some Shar`i viewpoints the Council chose, as follows:

The Decision of the International Islamic Fiqh Academy

A. Shares/stocks

1. Participation in companies

a. Since dealings are lawful in principle, the establishment of stock companies that have lawful objectives and activities is permissible.

b.There is no controversy about the prohibition of participating in companies whose basic objective is prohibited, such as dealing with interest or producing and trading prohibited products.

c. In principle, it is forbidden to invest in stocks of companies that sometimes deal with prohibited transactions, such as interest and others, although their main line of business is lawful.

A complementary decision taken by the ECFR

Concerning the Muslim minorities in the West—where there are no Islamic institutions or companies that have lawful objectives and activities—the ECFR decides that “there is no objection to their dealing with the shares of stock companies whose main objective is lawful and that avoid unlawful lines of business, such as breweries, pork, and gambling, even if these companies have interest-based deposits or loans or unlawful subordinate assets, provided that one observes the conditions set up by the Shar`i committees and by the fatwa given in the banking forums. They are as follows:

1. The loans from conventional banks should not exceed one-third the assets of the company.

2. The interest earning must not make more than 5 percent of net earning.

3. The unlawful assets should not exceed 10 percent of the total assets, provided that one should get rid of the interests and unlawful earning, whatever their proportion may be, through disposing of them for charitable purposes and that the circulation, in the case of increase in kind assets and benefits, should be confined to debts and cash.

One should refer to the institutions approved by the legal (Shar`i) agencies to classify the acceptable companies, such as Islamic Dow Jones Index, which is approved by the Shar`i agency of the index and others.

2. Underwriting

Underwriting is an agreement by a person to purchase all the remaining shares that are not purchased by existing stockholders. This is not forbidden according to Shari`ah if the agreement is to purchase the shares at the nominal value without any compensation for that agreement.

It is permissible for the committed person to receive compensation for an action he performs—other than underwriting—such as preparing studies or marketing shares.

3. Paying the value of the share in installments on underwriting

It is not forbidden in terms of the Shari`ah to pay an installment of the value of the share(s) and postpone the payment of the other installments, for this is regarded as participation in what is paid in advance and the promise to increase the capital. This entails nothing unlawful because this covers all the shares, and the company remains responsible with all its declared capital before the others, for it is the amount agreed upon and known by the parties dealing with the company.

4. Bearer shares

Since a bearer share is a common portion of the assets of the company, and the share certificate is a document to confirm this right in the portion, it is not forbidden in terms of Shari`ah to issue and circulate shares in the company in this way.

5. The role of the contract in selling shares

The role of the contract in selling shares is the common portion in the assets of the company, and the certificate of the share is a document securing the right in that portion.

6. Preference shares

It is impermissible to issue preference shares with financial properties that lead to guaranteeing the capital, a minimum return, or priority in paying at time of liquidation or on distributing the profits.

It is permissible to give privileges related to procedural or managerial matters to some shares.

7. Dealing with the shares usuriously (i.e., in a riba-based manner)

a. It is impermissible to buy shares with a riba-based loan offered by a broker or somebody else to the buyer in exchange for mortgaging the share, because this involves riba and documenting it through the mortgage, and both deeds are unlawful in the light of the text that curses the eater of riba, the one offering riba, the one that writes the contract for riba, and the two witnesses to it.

b. It is impermissible also to sell a share the seller does not possess, but the seller is promised by the broker that the latter will lend him the share at the time of delivery, for this belongs to the case of selling what the seller does not possess. The prohibition is stressed if the seller stipulates that the value be given to the broker to benefit by it through depositing it on interest to obtain compensation for lending.

8. Selling or mortgaging the share

It is permissible to sell or mortgage the share but in conformity with the rules of the company’s system, such as allowing the sale unconditionally, or conditional on observing the priority of the old shareholders to purchase the share. Similarly, allowing the partners to mortgage the common portion depends on referring to this in the system.

9. The issuance of shares with issuance fees

It is not impermissible in terms of the Shari`ah to add a certain proportion to the value of the share to cover the expenses of issuance, as long as this proportion is appropriately estimated.

10. Issuing shares with issue bonus or issue deduction

It is permissible to issue new shares to increase the capital of the company, if they are issued at the actual value of the old shares (according to the experts’ assessment of the assets of the company) or at the market value.

11.The guarantee of the company to buy the shares (the ruling on which was postponed in the decision of the Academy)

The European Council for Fatwa and Research resolves that it is permissible for the company to issue an obligatory promise to buy the shares from some of their bearers during their period or on liquidation at the market value or at a value agreed upon on purchase. It is not permissible to promise to buy at the nominal value.

The rest of the decision of the Islamic Fiqh Academy, which the Council confirms:

12. Determining the liability of the limited-stock company

It is not forbidden in terms of Shari`ah to establish a stock company with liability limited by its capital, for this is known to those who deal with the company, and due to this knowledge those who deal with the company become free from gharar (risk).

Nor is it impermissible in terms of Shari`ah for the liability of some shareholders to be unlimited in respect of the creditors without receiving compensation for this commitment. This is in companies including cooperative partners and partners with limited liability.

13. Confining the circulation of the shares to authoritative brokers and stipulating fees for dealing in their markets

It is permissible for the relevant authorities to regulate the circulation of some shares, such as confining them to special brokers with permits to do the job, for this is among the official procedures that realize some legitimate interests.

B. Option trading

1.The nature of the contract

Option contract means substitution for commitment to sell something well defined, or buying it at a specific price during a certain period of time or at a certain time, either directly or through an agency that guarantees the rights of both parties.

2. Its ruling in terms of Shari`ah

Option contracts—as they are dealt with nowadays in the international stock markets—are innovated contracts that do not belong to any category of the known contracts of the Shari`ah. Since the contract does not involve a fund, a benefit, or a financial right that can be substituted for, the contract is impermissible in terms of the Shari`ah; and as such contracts are initially impermissible, they are impermissible to circulate.

C. Dealing with goods, currencies, and indices in organized markets

1. Goods

Goods are dealt with in organized markets in one of the four following methods:

a. That the contract includes the right of the immediate delivery of the salable articles and the value, and the goods or receipts representing them should be in the possession of the seller and his hold. Such contract is permissible in terms of the Shari`ah with the known conditions of selling.

b. That the contract includes the right of the immediate delivery of the salable articles and the value, and the possibility of the delivery thereof being guaranteed by the agency of the market. Such contract is permissible in terms of Shari`ah with the known conditions of selling.

c.That the contract is for delivering a defined article in one’s debt at a deferred date and paying the value on delivery, and that it includes a condition that the contract ends upon delivery and receipt. This type of contract is impermissible because of the determent of the two exchanged things. This contract can be amended to comply with the known conditions of salam (full payment at the time of the contract) whereupon the contract becomes permissible. It is also impermissible to sell an article that is bought by salam before receiving it.

d. That the contract is for delivering a defined article in one’s debt at a deferred date and paying the value on delivery, without including a condition that the contract ends upon delivery and receipt of the article, but can be settled with an opposite contract. This is the more common type in the goods market, and it is primarily impermissible.2. Trading currencies

Trading currencies in the organized markets is practiced in one of the four abovementioned methods followed in trading goods. It is impermissible to purchase or sell currencies according to the third and fourth methods.

As to the first and second methods, it is permissible to purchase and sell currencies conditional on observing the known conditions of sarf (currency exchange).

3. Dealing with the index

The index is a calculation, by a special statistical method, to find out the size of change in a certain market; dealings with it are carried on in some international markets. It is impermissible to buy or sell the index because it is pure gambling, and it is just the process of selling something imaginative that cannot exist.

The Shar`i alternative to unlawful transactions in goods and currencies

An Islamic market for goods and currencies should be organized on the basis of dealings permitted in the Shari`ah, particularly bay` al-salam (payment in advance), sarf (currency exchange), promise to sell at a deferred date, and istisna` (custom order).

The Council opines that it is necessary to undertake a comprehensive study of the conditions of these alternatives and the methods of applying them in an Islamic organized market.

Islamic economists and financial experts agree that if certain conditions are met, it is lawful to invest in the stock market. Any earnings that result from such investments will be halal. The logic behind this argument is that when one purchases shares in a company he actually becomes a shareholder and thus becomes a partner in the business. Thus, this arrangement is akin to the Islamic concept of musharakah. However, there are a host of conditions that must be satisfied before one is allowed to invest in stocks. To start with, one must be sure that the business of the corporation/company offering the stock must be halal. Over and above this, shariah scholars have developed certain financial parameters for stocks selection. These are mainly related to the capital structure of the company. The purpose of these criteria is to determine the level of involvement of riba (interest) and gharar (uncertainty) in the overall business of the company.One should keep in mind that these criteria are the results of modern fiqh scholarship (ijtihad) and therefore, should be seen to represent the current state of thinking on the issue. In that way, they represent the maximum tolerance levels and not the last word on the subject. In short, if a Muslim investor is contemplating investment in the stock market, he must not only be careful about the profitability but also about the compliance of shariah. These can be done by looking at the nature of business, percentage of income from interest and the financial soundness of the company. While there are a number of tools available to help understand the financial soundness of a company there are not many that can guide an investor in determining the shariah compliance of a stock. Following screening patterns may be helpful in determining the shariah compliance of stocks.Islamic Investment Criteria

A. Qualitative Screens
There are two types of qualitative screens:
i. Industry screening: Is the company in a business that is prohibited or abhorred in Islam? Apart from investment in banking and finance there are a number of business activities that are considered to be prohibited in Islam, and thus investing in these kinds of businesses is not something a Muslim would like to undertake such as alcoholic beverages, pork and pork products, tobacco products, gambling, lottery, pornography and adult oriented material, prostitution and drugs etc.
ii. Business practices: Following shariah principles are applicable to investing and trading practices applicable to individual investors as well as Islamic financial institutions:a. Investible funds must be free of interest based debt:
The investor cannot borrow on interest to finance his investments, and therefore cannot trade on margin i.e., borrow to purchase shares. Conventional hedge funds, arbitrage funds, and leveraged buy-out (LBO) funds are prohibited for Islamic investors as they all borrow heavily in order to finance their investment practices.b. Prohibition of speculation
Unlike conventional investors Muslims cannot base their investment decisions on short-term speculation. They cannot enter the market as speculators but only as investors.

There are three types of quantitative screens:
i. Debt/Asset Ratio:
Has the company borrowed funds on interest? Ideally there should be no interest-based debt, but based on the Islamic legal principle “li al-akthar hukm al-kul” (to the majority goes the verdict of the whole) and subsequent scholarly opinions, a company is not a permissible investment if debt financing is more than 33% of its capital. This could be calculated as Total Debt divided by Trailing 12-Month Average Market Capitalization (where Total Debt = Short-Term Debt + Current Portion of Long-Term Debt + Long-Term Debt).ii.Interest-related Income
Does the company generate any interest or interest-related income? This only includes those companies which do not make earning interest their business, but place their surplus funds in investments that yield interest income. As in the previous case, ideally no income should come from interest-related sources. However, looking at the current situation shariah scholars have permitted to invest in stocks of companies whose income from interest forms less than 5% of a company’s total income. Some scholars have fixed that ceiling at 10% of a company’s total income.iii. Monetary Assets
To invest in shariah compliant companies, one has to be very careful about company’s monetary assets. Accounts receivables and liquid assets such as bank accounts and marketable securities have to be below the limits fixed by shariah scholars for the investment to be permissible. Some scholars have set this minimum at 51% whereas the majority of shariah scholars agree that “Accounts Receivables” should not be over 45% of company’s total assets (where Accounts Receivables = Current Receivables + Long-Term Receivables).

i. Day Trading
Day trading has little to do with actual investing. Usually day traders watch the market and buy and sell on short-term price fluctuation (normally within one day). For this reason, a number of Islamic scholars have termed this as closer to gambling and thus it is prohibited.ii. Margin Trading:
Margin trading is buying stocks using money loaned from the broker. Interest is paid for this loan, and therefore it is prohibited. Moreover this is a very risky (and complicated) practice, as one can lose more than what he has borrowed.iii. Derivatives – Options and Futures
Option is purchasing the right to buy or sell a stock or a commodity at a future date for a fixed price (regardless of the then prevailing price in the market). Exercising this option means buying at the price set in the past. Not exercising the option results in the investor paying the option fee. A great majority of scholars are of the opinion that Futures trading is not permitted in Islam.