Gambling or Investment?

Getting engaged in shares in the stock market. Is that gambling or investment? That is a question that perhaps many people, especially children, will ask to share-buyers.

For many people, it seem like gambling, because people spend money into buying shares and hope that the stocks will go up, thus allowing them to profit from their shares. It is like letting your money make more money. And (touchwood!) if the stocks should go down, then it's considered that you've lost the bet. Therefore, for some, buying shares is still like playing Russian Roulette, where much luck (and maybe, prayers) are needed to get some profit.

But what many people don't realise is this, that Islamic laws prohibit gambling (therefore Muslims are prohibited from gambling) but buying shares in the stock market (or Stock Exchange) is not considered as gambling, and as such, is "halal".

Buying shares is actually a type of investment, where money is invested into a certain company for a certain percentage of shares. The money invested will be used by that particular company to conduct its businesses, and whatever profits it gains are duly and equally distributed to its share holders, depending on how much shares a particular share holder possesses.

Some people view buying shares as an alternative to saving your money in the bank. They spend some money in buying shares (which becomes an asset), and the profit gained from it is considered as interest. However, in this case, it needn't take long for you to gain the "interest" that you may only get after saving for a year or two. Plus, when you invest in shares, companies would pay you dividends, which is some sort of a bonus to share holders.

Therefore, kids especially, do not see share buying as a form of gambling; your parents are making important investments for a better future. Many people who are rather uneducated (because they do not have the chance to study) get into shares to make ends meet. And some have become wealthy from shares.