ETFs Beginner Qs

[riane87]

Salaam and Eid Mubarak. I’m completely new to investing so please excuse my lack of knowledge.

I’ve started putting in money into HLAL and plan to do so every month, not a lot but if my research is right ETFs are very long term investments. So my question is how does one benefit financially from doing this exactly? Do you sell the shares after X number of years? Say I’ve put in £6k over 2 years - if the price of the shares are good would it be a good to sell them? Or is it more of a 20-year situation and cash in then?

Again, I’m babybrained on this matter so appreciate any guidance.

 

[paulacs]

@riane87 Wsalaam. Ideally the longer the time horizon the better. I’d aim for a minimum lock-up of five years but in reality you’d want ten years plus. But yes, your main source of return is expected to be capital growth and realising this as profit upon a future sale of the shares, if it all works out. Another source would be from dividends paid which ideally are reinvested to compound the growth. After two years, you’re unlikely to have significant capital growth based on average growth rates so I’d just temper your expectations.

 

[princesst1]

@riane87 ETFs are for capital preservation not making money.

If you randomly picked any ETF top 5 holdings and investing in them instead you would make more money then investing in a ETF.

ETFs are for set it and forget and hope within 5 - 20 years you'll profit tyoe of investors.

All have do is find top 5 holdins and any eft and view where there were 52 weeks ago and compare to now.

Hlal has only gained $10 over 52 weeks.

$38 to $48

Its top 5 holdings are as follows

Microsoft $272 to $430 ($158 per share)

Apple $159 to $199 ($30 per share)

Meta $206 to $531 ($325 per share)

Google $103 to $161 ($58 per share)

Eli lilly $364 to $800 ($436 per share)

If one had invested in any one these stocks they would have made money than investing in HLAL.

 

[tommysoda]

@riane87 $SPUS is another sharia compliant ETF similar to $HLAL but may be better. Also tracks the top U.S. companies.

If you want to diversify into global companies, there is the $UMMA ETF.

There is no “rule” for how long you should keep your money in the ETF as peoples’ circumstances are so different. I’d say if you don’t need the money immediately and have some emergency funds available elsewhere if needed, just continue investing in ETFs and then you can sell whenever you need the funds or continue to hold and continue adding to it.