Muslim investors profit by adhering to faith during the economic crisis

    As the financial crisis in the United States worsens, the conservative principals of a small group of devout Muslims have helped to insulate them from economic suffering. Their renunciation of the interest-based economy kept them away from traditional mortgages and away from making investments in financial service companies, whose stocks have plummeted.

    Islamic finance, a system of ethical finance supported on an institutional level, is proving to have helped many Muslims avoid or lessen damage to their financial stability, while still not a total panacea in the unavoidable crisis. “I don’t think there’s anything miraculous about Islamic finance, or that it’s a panacea. But we can understand why Islamic banks did well in the current financial environment,” said Ibrahim Warde, a professor at the Fletcher School of Law and Diplomacy.

    Mohem Salam, director of Islamic investing and a portfolio manager for Saturna Capital, warned against basic Islamic financial practices solely on sharia law: “We don’t claim to our investors that we’re going to be consistently outperforming the market because we have sharia criteria. We’re going to give our investors the best return they can (get) based on the criteria. If that means out-performance on certain indices, then great.”

    In the end, many Muslims are finding that adhering to faith and keeping themselves spiritually clean has helped minimize financial suffering.

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