Investments (Including Risks) and Investing

Investments (including Risks) and Investing Body (title To Be Determined) Investing (Including Risks) History of Investing Risks Conventional Banks and Financial Houses Investments Sharia Compliant Sukuk Conventional Banks and Financial Houses Contemporary Considerations Differences Similarities Analytical summary Investing (Including Risks) Investments Contemporary Considerations Thesis reworded Concluding statement "Risk management as a science is the same whatever the nature of the investor or institution" (al-Bahar, as cited in Melly, 2008, Investor appeal Section, ¶ 3).

In the contemporary global financial sector, Sharia-compliant financial institutions, like conventional banks and investment houses conducting business in the current international expansion, desire to diversify and spread risk.

In the article, "Risk moves up the agenda: Islamic banks are following the mainstream institutions in seeking to spread their risk, but have far fewer financial tools available to them," Adnan al-Bahar, chairman and managing director of The International Investor (TII), contends that because "the Islamic finance sector is still at an emerging stage of development, it has not yet generated a range of instruments that can match the breadth of what is on offer in the conventional finance arena" (al-Bahar, as cited in Melly, 2008, Investor appeal Section, ¶ 4).

During the research paper, the writer examines investments (including risks) and investing in the sometimes confusing financial realm. The writer asserts that although the investment risks customers of conventional banks and financial houses may experience sometimes differ from those customers of sharia-compliant financial institutions may encounter, the risks also prove similar in particular situations. The article, Sharia-compliant: Keep the faith (2009), stresses: Islamic finance has its roots in Sharia law, under which making money from money is forbidden and money should only be made through legitimate investments.

Red parts above have not yet been rewritten. This means there are two main differentiators between Islamic banking and conventional lending. First, Islamic banking is ethical. Investing in businesses that are considered unethical is prohibited. This includes companies that deal in arms, gambling, pornography, tobacco or any other commodities contrary to Islamic values. And second, interest is forbidden. "Islamic banking is structured on the principles of risk-sharing and entrepreneurship," says Steven Amos, head of marketing at the Islamic Bank of Britain.

"Rather than paying interest, Islamic banks share profits according to a ratio agreed in advance with their customers. The main difference between Islamic and conventional banking is that Islamic teaching maintains that money itself has no intrinsic value. "To make money from money is prohibited - wealth can only be generated through legitimate trade and investment. Any gains relating to this trading are shared between the person providing the capital and the person providing the expertise." (Sharia-compliant…, 2009, ¶ 9-13).

Martin Steward (2008) argues in the article, "Sharia-compliant investing - Balancing profit with religion": The fact that alternative investment techniques differ qualitatively from traditional equity investing raises the question of whether or not these new structures merely disguise interest as profit via financial engineering. Indeed, in some recent private equity and real estate deals in the Middle East some of the more conservative voices have prevailed against murabaha arrangements, saying that standard loans, though not halal, are preferable to what they regard as hypocrisy. (Steward, 2008, ¶ 15).

II: BODY (TITLE TO BE DETERMINED) Introduction To explore the thesis, introduced at the start of the paper, the writer addresses the question: Do the investment risks that customers of conventional banks and financial houses may experience differ from those customers of sharia compliant financial institutions may encounter? During this segment of the research paper, the writer relates relevant information to Investing (Including Risks) Investments Contemporary Considerations Investing (Including Risks) Investments Sukuk depict one type of bonds that meet the sharia requirement that interest cannot be charged or received.

Sukuk often work so that those who hold them as investments are entitled to a share of the profits of the company that issued the sukuk. Contemporary Considerations III. CONCLUSION A. Analytical summary 1. Investing (Including Risks) 2. Investments 3. Contemporary Considerations B. Thesis reworded C. Concluding statement REFERENCES Adam, N.J. & Thomas, A. (2004). Islamic bonds: Your guide to issuing, structuring and investing in sukuk. London, United Kingdom: Euromoney Books. Bennett, D. (2007).

The 0% solution - A renaissance for "Islamic finance" - a version of capitalism that avoids interest - offers innovative financial tools to Muslim and non Muslim alike. The Boston Globe (Boston, MA). McClatchy-Tribune Information Services. Retrieved September 30, 2010 from HighBeam Research: http://www.highbeam.com/doc/1P2-10162794.html Cagan, M. (2009). The Everything Investing Book: Smart Strategies to Secure Your Financial Future! Online Publisher: Everything Books. Avon MA: Adams Media. Kamso, N. (2008). Does syariah-compliant investing limit returns? New Straits Times. Financial Times Ltd. 2008.

Retrieved September 30, 2010 from HighBeam Research: http://www.highbeam.com/doc/1P1-157948129.html Kristof, K. (2010). Investing 101. Hoboken, NJ: John Wiley and Sons. Lowell, J. (2007). Investing from.