Advantages and Risks of Islamic Investment

Abstract

In the Islamic context, investing is highly recommended so that the future can be guaranteed. Of course, investments made by Muslims must be in accordance with Islamic rules. Investing in economy Islamic concepts will provide a sense of security and comfort for Muslim investors, without fear of deviating from Islamic teachings. As a devout Muslim, of course, investment choices must be appropriate and in accordance with the concept of Islam. The difference between conventional Islamic investment lies in the benefits given. The advantages of Islamic investment are in the form of profit sharing, while the conventional concept is interest. In the teachings of Islam, interest is haram, because it does not recognize value for money. In the view of Islam, money will not developed by itself but must go through productive and ruleful efforts. The purpose of making this paper is to discuss the advantages and risks in Islamic investment. This paper uses a literature review approach that comes from journals, books, the internet, and other sources. The results show that the advantages of Islamic investment are riba-free, minimal risk, Islamic management, halal and promoting social activities. Meanwhile, the risks that may be faced by investors are the risk of losing capital, the risk of uncertainty of return, and the difficulty of selling investment products. From the results, it was found that currently Islamic investment products are favored by non-Muslims alike. The concept of profit sharing is considered more profitable than interest. It can be concluded that Islamic rules can now be accepted by various groups of people in the world.

Price Index Modeling and Risk Prediction of Sharia Stocks in Indonesia

“…In practice, there are two forms of Islamic investment that investors may choose: tangible assets (real assets) and financial assets. In recent years, Islamic investments in financial assets tend to be more attractive to investors in Indonesia than real investment because Sharia investment in financial assets offers many benefits that may be greater than investing in tangible assets without violating Islamic Sharia (Toto et al 2020).…”

Preference of Indonesian Muslims Investment

“…investment product at an Islamic Institution has been reviewed by an authorized institution and is in accordance with sharia principles. Other researchers suggest(Toto, Herlina, & Darna, 2020) that the advantages of Islamic investment are usury-free, minimal risk, Islamic management, halal, and social activities. Meanwhile, the risks that investors may face are the risk of losing capital, the risk of uncertainty, and the difficulty of selling investment products.…”