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My Experience And Insights Beginning In The Stock Market

If we see the stock market as like our lives, we can understand the need to be patience through the ups and downs for success

By Aisha MohammadPublished 2 years ago 6 min read
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I had the idea of investing after reading on the internet that it can be a good way to grow your money. On YouTube, it seems that at least one person claims to have become a millionaire by putting their money into the stock market, buying shares and letting their money grow. There are also people who claim to have taken early retirement – as young as thirty-five or even while still in their twenties – because of building up a portfolio of stocks and shares that have regular dividends. When the dividends are high enough and they have a good selection coming in at different times they claim to be able to live off of them and give up their work.


]Due to the above reasons, I decided to see what would happen if I purchased shares and whether it would grow my money as were the claims. I realised that things were not so early or simple for me as an observant Muslim, trying to find shares that are considered, “halal” (permissible). A stock may not be halal if the company is selling or dealing with non-permissible things according to Islam law, these are things such as interest, alcohol, adult content things, getting money from entertainment and so forth. A company may also be permissible in general, since they do not deal with prohibited items but they may have too much debt or interest built up, which would also make it not permissible to buy their stocks and share in them. I found some specific internet sites that research and grade the stocks. They do have some slight differences between them, so one website may say a stock is permissible and another not. This is due to the different information these sites may have about the companies and they may also have different criteria. I therefore, used several of these sites to try and get a general idea about the stock.


After compiling a list of stocks that were permissible in Islamic law, I tried to find stocks that had dividends. This is because it is claimed that even if a company does not increase much you can still benefit throughout the year in payments by dividends. Most of the high dividend-yielding stock seemed to be from the non-permissible companies, however. In the end I compiled a list of stocks that were permissible for Muslims and also had high dividends and that seemed to be recommended by others. There are people who research the stock market and grade stocks into categories, such as “strong buy,” “buy,” “hold,” “sell,” and “strong sell.” These are often based on how well the company appears to be doing and what it is expected to do. Therefore, these are subjective and people may differ over the status of a particular stock. I tried to find the overall consensus.


In the end, I had a handful of stock that I was considering. It was then the price that came into account. Some stock is very expensive. Just a portion can be hundreds of dollars. For this reason, some traders recommend penny stocks that have some potential to increase over the years. You will not lose money and will benefit that way. However, I found that it was difficult to buy penny stock. Not all brokers or stock providers stock them.


I realised that I had to choose a stock provider in order to buy any stocks. Apparently, some companies allow people to buy some shares directly from them, however, it seemed that it would take a lot more time and effort to find which companies did that, and which companies were better so I attempted to find my own stockbroker. The problem was that many were US based. Had I been in the US I would have been able to get some stocks free from some of these brokers. It was not possible to register with them from outside. For this reason I ended up registering with etoro. It seemed that etoro was well known and recommended by many. It was possible to register from a variety of countries. They also have zero commission and Muslim traders seem to recommend it since there is no issue of interest on stocks. There were no penny stocks in etoro however, and not all the stock that I researched was there.


In the end. I decided that I wanted to buy one stock to try it out. I was deciding between BHP and Rio Tinto, since these were both recommended and both had dividends and were considered permissible. I wavered between the two a little, but in the end, I chose Rio Tinto since it seemed more promising. More people were recommending it and it seemed to have much higher increases at times. BHP seemed a lot more stable. Therefore, I guess it depends on what a person is hoping to gain from the stock.


Etoro allows you to buy part of a whole stock but you must purchase at least 50 dollars from any stock. Therefore, I bought a part of a share for fifty dollars while the whole share was above sixty. There are a variety of methods to pay using etoro. I paid with PayPal.


The next few days I was checking my account. Rio Tinto was increasing in the first few days. I saw the fifty dollars I paid increase to 52, 53 and grew slightly. I thought it was doing well then. However, after a short while the stock began to plummet. Etoro shows increases in green colour with a plus sign, and decreases in red with a minus sign. It showed red and I watched the increase that occurred in a few days begin to plummet. In fact, this continued for several months. I wondered if I had somehow made a mistake buying Rio Tinto, and if I should have bought another stock. I even wondered if I should sell it. However, I thought that if I sold it I would just lose everything then and not benefit. If I left it maybe it would be down for a time to and would eventually increase again. That seemed more logical than selling it. In recent months I have checked the account again and Rio Tinto has been on the rise. This is shown in green colour. I have made a small amount in this time, which is about 3.50 probably from the dividend. It cannot be drawn out until it reaches thirty dollars, however.


From this experience, I have realised that in the stock market things are not quite as simple as they seem and perhaps there are certain skills needed to be able to choose stock and know how to deal with the stock market. However, I have come to see trading as like dealing with life in general. Life has its ups and downs and so does the stock market. We cannot really control these ups and downs but we can always deal with them through patience. When you buy a stock you really can only be patient until it increases or decreases. Patience may lead us to success in the ups and downs of life as well as that of the stock market.

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About the Creator

Aisha Mohammad

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