Muslim investors profit by adhering to faith

This past week in my Problems in Finance class we did a fast review of international finance (I miss teaching that class BTW). In it we did not get to speak about many of the differences based on religion, so I was pretty excited to see this article from the San Francisco Chronicle that will provide me an excuse to mention that strict adherence to the Quaran does not allow lending and borrowing.

Muslim investors profit by adhering to faith:

"Their renunciation of the interest-based economy kept them away from investments in financial services companies, whose stocks have collapsed, and out of traditional mortgages.....Dow Jones Islamic Market Indexes, which represent benchmarks for Islamically correct investment categories, have been outperforming their non-Islamically compliant counterparts by 3 to 4 percent in key indexes.

Of course one year does not mean that much, but it does show that at least last year forgoing debt, for whatever reason, was a good thing!

BTW If you are interested in this, here is a page of notes on Islamic Finance that I used back when I did teach International Finance. I have not touched it in a long time.