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Common Investment Strategies

Common Investment Strategies

If you have determined all seven positions for yourself, you are ready to choose your own investment strategy. The range of choices is quite broad. Below are some common investment strategies:

  1. Defensive: Investments in deposits, highly liquid securities, and short-term Sukuk. Goal: maintain liquidity and obtain small current income with minimal risk.
  2. Conservative: Investments in government and corporate Sukuk with a small portion in high-dividend stocks. Some of the portfolio may be in highly liquid real estate for stable rental income (e.g., through a rental mutual fund). Investments in precious metals, such as through "metallic" accounts at a bank, can also be considered. Goal: achieve stable income with limited risk.
  3. Balanced: A portfolio of stocks, Sukuk, and real estate funds, positioned between defensive and aggressive strategies. The allocation between stocks and Sukuk can be fixed (e.g., 50:50) or vary over time.
  4. Aggressive: Investments in stocks for long-term growth, including real estate through developer and construction funds, Mudharbah and Musharakah ventures. Goal: maximize potential profit with higher risk.


How can these strategies be applied to manage three types of capital? For current capital, a defensive strategy is ideal since its primary task is high liquidity. Reserve capital aims for reliability while protecting investments from inflation, making a conservative strategy suitable. Finally, investment capital benefits from balanced and/or aggressive strategies. Depending on your goals and risk tolerance, you can choose a specific asset mix accordingly.

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