Sometimes getting rich means not to lose money as well. So there have been times in history when to preserve your money have had highest priority. One could argue whether we're living in such a period of time right now. The point is that we usually discover it only when it's too late.

So how to preserve your money? You can do this by buying tangible assets - we call it real assets. You see we're not talking about paper assets like derivates or whatever artificial financial products nobody understands. We're talking about assets which have survived history - real assets.

One of these assets is gold. Why gold? Because it's a scarce, limited resource. You can not increase or multiply it as you like. That's why gold preserves your money and is what we call a real asset. In the Roman Empire you could have bought a tunic (roman outer garment) for a piece of gold. Nowadays you can buy a tailor-made suit for an ounce of gold. Gold keeps it's value even or especially in insecure times. That's simply the point.

Below you can see a chart of the historical market value of gold.

As you can see taking inflation into account gold was as high as 2,145 USD/oz in 1980 (as of Sept' 2007). Right now gold is at around 950 USD/oz. So actually there is still upside potential.

So how do you invest in gold? Basically there are 3 options:

1. You buy it physically, meaning you go to a bank or a gold shop and buy pieces of gold. Especially when you buy larger amounts this could be a security problem or at least leaves you with storage costs.

   Buying physical gold is the easiest way for Muslims, because this is absolutely fine with Shariah-principles as you're in possession of the gold. 

2. To avoid storage costs you could go for a gold ETF-investment (ETF, Exchange Traded Fund). This means you buy shares of an equity fund, which buys and stores the physical gold for you and other investors. If you for example invest USD 1000 in an gold ETF then they buy gold for USD 1000 (less management fees and costs of the fund) and store it in a secured and insured place. This is easy to do. You just have to go to your bank or broker to buy.

   When buying a gold-ETF Muslims have to take care of buying an Shariah-compliant ETF. There's just a few we found which is Al Bogari Islamic Gold, Dubai Gold Securities (DGS) trading on Nasdaq Dubai,
   

3. One more option is to invest in gold mines, meaning you buy shares of a gold exploration company. This leaves you with the risk that sometimes the market value of the share is not related to the gold price. For example if the management of the company is doing a bad job then the price of your share could go down, even if the gold price is rising.

   Buying shares of goldmines is probably the most challenging investment for Muslims. It involves more efforts for Muslims to invest in gold mines. You have to check carefully if the company is Shariah-compliant. And many companies are not complying with Shariah-principles as they e.g. are financed in conventional ways (no interest is allowed, usury), etc... If you want to dive into it there is an article we found for you: Shariah-compliance for mining stocks. 

All 3 investment possibilities are in common that you can sell your investment quite easiliy in case you think of cashing in.

Whichever way you chose it is important that you do not put all eggs in one basket. It's not advisable to invest all your money in gold. Economic books talk about a share of around 10-15 % of your assets.

In either case gold lets you sleep calmly.

TO GOOD INVESTMENTS IN 2009!

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• 2010-12-03 13:39:19 | Nasr  - WOW! That´s hot

  Mahathir urges use of gold standard

  By MUSHTAK PARKER | ARAB NEWS

  Published: Nov 21, 2010 23:20 Updated: Nov 21, 2010 23:20

  LONDON: Malaysia's elder statesman Mahathir Mohammed, the favorite politician of the Muslim man in the street and former prime minister, is never far from controversy.

  Addressing the 5th International Shariah Scholars Forum, which was held in Kuala Lumpur recently in conjunction with the Global Islamic Finance Forum (GIFF) 2010, Mahathir in an outspoken attack stressed that the "collapse of conventional banking, finance and the monetary system has exposed their weakness and the ease with which they can be abused."

  At the same time, in a stark warning to Islamic banks, he bluntly advised them to avoid getting involved in unethical practices in their pursuit to compete with conventional banks. Islamic banking in its current nascent stage, he added, cannot afford any disaster at a time when the industry is trying to gain acceptance as an altern...

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• 2010-09-01 22:53:16 | Abbudin

  http://www.opalesque.com/OIFIArticle/82/Gold_Bullion_and_Islamic_Pr ivate_Equity384.html

  that´s interesting!

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• 2009-09-19 13:32:53 | Nasr  - IMF sells gold

  oops! just read that IMF sells 403 metric tons of gold!
  http://www.bloomberg.com/apps/news?pid=20601087&sid=aI4fr1DhjXRc

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• 2009-09-19 12:12:25 | Nasr  - gold price even higher

  assalamu alaykum,

  i think by 2009 the inflation-adjusted gold price was even higher, around 2,300 USD
  best wishes

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• 2009-09-12 15:03:29 | Abbudin

  i'm looking quite for a while now how to invest my little savings as i do not trust the stock market. so thanks for the suggestion! and hopefully it pays off!
  )

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