Islam and the Stock Market

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Q: Are stocks and shares permitted?

A: ‘If one wishes to buy shares of various companies, there is no harm in doing so. You may buy shares through the stock exchange. However, if a person turns this into a business and starts buying and selling shares with the same kind of obsession as a gambler (i.e. if someone says ‘now that the market has gone up, I will sell my shares’ or ‘now that the market has come down, I will buy some shares’) and constantly remains occupied in keeping a keen eye on when a particular share in the market goes up or down from morning till evening, then this comes under gambling and one should refrain from doing this.

Aside from that, there are companies and businesses that sell shares, and there is no harm in buying shares from them. They should be businesses that you know are ethical. You should not make investments in companies that establish pubs and bars or companies that are associated with gambling or that are involved with such vices, and simply say ‘I have only bought shares’. You may become a share-holder of well-established and lawful businesses of the world. For example, there are sugar mills, textile mills, the car industry and other industries; these are all businesses which you become a share-holder of. People do buy shares in such businesses. However, to become so occupied in this to the extent that it becomes a business for you where you constantly keep a keen eye on the market to see when it goes up or down to make as much money as possible, and to keep track of how many shares you have bought or sold is not right. Companies sell their shares, right? So, you may buy them.’ [1]

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Q: If we are not allowed to gamble, then why are we allowed to buy shares in the stock exchange?

A: ‘The speculation is the only guideline then it is not a free trade. Free trade is something with which commodities exchange hands and you buy a thing and you get it, and then it is entirely up to you to sell the rare commodity whenever you feel you have gained an advantage and you can sell profitably. This is a rare trade. But in speculation, you do not buy anything in reality, only in name and you do it only in a spirit of gambling. Things happen here and there in the world and suddenly the prices tumble down and things happen here and there in the world and suddenly they skyrocket again and all of these factors are not free from exploitation. This is the worst part of it. In the world money market, these things are being manipulated intentionally, and they are very big houses like Mafia who control the trade of speculation and you cannot defeat them. It’s impossible. If not now, later on, those who earn some quick money in the beginning, lose not only their own money but also of all the people from whom they had borrowed or whom they had enticed to participate in the business. So it’s a bad thing, don’t think of that. If you’re asking for yourself. Right?’ [2]

ENDNOTES

[1] Hazrat Khalifatul Masih V, Hazrat Mirza Masroor Ahmad (aba), Delegation from Sweden Mulaqat, 13th March 2020.

[2] Hazrat Khalifatul Masih IV, Hazrat Mirza Tahir Ahmad (rh) Question/Answer Session with Khuddamul Ahmadiyya, 22nd September 1996