Written by Haider Saleem
Financial and Political Analyst | LinkedIn / X
Date: April 14, 2025
Volatility doesn’t mean vulnerability. In this article, I list a framework grounded in Islamic finance principles and financial planning.
These eight strategies are designed to keep your portfolio steady and your decisions faith-aligned.
April’s Global Market Shocks, Explained
President Trump’s newly imposed tariffs — some as high as 145% on Chinese goods — have sparked a market storm. Stocks slid, oil tumbled, and confidence wobbled.
- S&P 500 down over 10% in just three days
- Semiconductors plunged over 20% so far this year
- Global supply chains scrambled to pre-empt looming duties
Even with a 90-day pause on some tariffs, the uncertainty remains. Companies like Apple have resorted to flying iPhones into the U.S. to avoid penalties. Meanwhile, fears of a U.S. recession are growing, and central banks are struggling to respond with synchronized policy. All of this adds up to high volatility — and high anxiety.
Gold has also surged to a new record high of $3,223.72 per ounce, driven by escalating trade tensions and a weakening U.S. dollar. After China raised its tariffs on American imports to 125% in retaliation, investors rushed into safe-haven assets. As a result, gold prices have soared — reinforcing their traditional role as a hedge in uncertain times.
1. Stay Calm
Market turbulence can be a tricky time for investors to navigate. It’s easy to get caught up in the emotion of a market fall and have a knee-jerk reaction, such as selling investments or trying to time market moves. But it’s important to keep a level head in these times, avoid some of the market noise and stick to your investing plan.
Volatility is inevitable. Even the best-performing portfolios experience short-term swings. Selling during moments of panic can crystallize losses and prevent you from benefiting from the eventual rebound.
Remember: time in the market is more important than timing the market.
A long-term perspective helps you ignore the noise and stay focused on your goals. Instead of reacting impulsively, take a breath, revisit your plan, and keep your horizon in sight. Emotional reactions often lead to selling low and missing out on recovery rallies — a double hit to your returns.
2. Don’t Make Changes in Haste
Fear-driven decisions can quickly erode long-term potential. Impulsive reactions to falling markets often lead to panic selling — locking in losses and missing rebounds. Avoid over-monitoring your portfolio. If you have a diversified, values-aligned plan, reviewing your investments once a month is usually sufficient.
Quick fixes rarely deliver lasting results.
A sudden sell-off can be a great teacher. If you panicked or sold during the drop, ask yourself why. Were you taking on too much risk? Not diversified enough? Or unclear on how your holdings would react to volatility? Learn from it and adjust — don’t abandon your investing goals altogether.
3. Invest Regularly
One way to manage uncertainty and take emotion out of investing is through regular contributions. Dollar-cost averaging means you buy more when prices are low and less when they’re high, lowering your average entry price over time.
Even modest contributions can compound significantly over the years.
Set up automated, monthly halal investments to remove the guesswork. This approach, known as dollar-cost averaging, works particularly well in volatile environments by smoothing purchase prices. You also avoid the mental burden of trying to time the market.
4. Review Your Plan
Volatile markets are a reminder to revisit your strategy. Has the recent chaos revealed gaps in your diversification? Do you have too much exposure to a single stock or sector? Is your cash allocation appropriate for emergencies?
Ask yourself: Is your mix of investments right? If everything dropped sharply, you might need to rebalance across halal sectors or shift away from overly risky assets. If you’re uncertain how to do this, multi-asset or balanced funds — including halal-compliant options — can help manage this process.
Your investment strategy should evolve with your financial situation — and your temperament.
5. Diversify Permanently
A diversified halal portfolio should include a mix of equities, sukuk, real estate, and commodities. It also means spreading across industries and regions — don’t put all your eggs in one market or sector.
Diversification helps cushion the impact of sector-specific downturns.
Investors can reduce risk by using ETFs or multi-asset funds tailored to their risk appetite. These reduce the burden of monitoring individual stocks while maintaining shariah compliance. Remember: true diversification also includes different investment styles, such as value and growth.
Take a look at gold, which returned above the important $3,000 mark after two days of declines as global markets prepared for an out-of-control trade war. Historically, gold has been considered a safe haven asset in times of uncertainty, and a protection from inflation.
6. Stick to Your Strategy
Like a captain in rough seas, stick to your compass — your long-term strategy. Unless your circumstances or financial goals have changed, avoid overreacting to market headlines.
Your halal investment strategy is your anchor.
If you’ve taken the time to build a portfolio that aligns with your time horizon and tolerance for risk, don’t discard it during turbulence. Instead, rebalance strategically or ride out the cycle with conviction. Patience is often rewarded in investing.
Market timing is notoriously difficult — and often futile. According to JP Morgan analysis, over the last 20 years, seven of the 10 best days in markets occurred within just 15 days of the 10 worst days. For example, last Friday, the S&P 500 dropped by 6%, but the following Wednesday, it surged 9.5%. Missing that one day could cost you nearly 1.5 years of equity returns. The lesson? Stay invested. Historically, the S&P 500 has always recovered and reached new all-time highs after sell-offs. Even if it takes three years to rebound, the expected annual return is still around 6.8%, including dividends — right in line with long-term historical averages.
7. Include Income-Producing Assets
Adding dividend-paying halal stocks and sukuk to your portfolio offers stability. Even when market prices fall, income continues to flow — providing reassurance and long-term growth potential through reinvestment.
Reinvesting income accelerates long-term growth.
Also, consider whether your cash buffer is sufficient. If you had to sell investments in a downturn because you lacked cash, it’s a sign to hold more liquid assets or use money market funds to provide short-term stability without sacrificing halal principles.
8. Use Market Falls to Your Advantage
Every dip is also an opportunity. Market declines bring valuations down — giving long-term investors a chance to buy halal assets at lower prices. This is where keeping “dry powder” (cash or liquid instruments) is key.
This requires planning, patience, and emotional control.
For those holding too many individual stocks, this could be a chance to shift toward diversified funds. This reduces portfolio risk while maintaining exposure to long-term growth. Use Musaffa’s screening tools to spot undervalued Shariah-compliant opportunities.
Start Your Halal Stock Screening Journey
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Use Technology to Stay Halal-Compliant
Use tools to help invest ethically, such as Musaffa’s, which can:
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- Access a library of halal ETFs and screenable opportunities
⭐ Download the Musaffa App — your essential halal investing toolkit.
Final Thoughts
Market volatility is a stress test. It reveals your portfolio’s weak spots — and your own investing temperament. Learn from it. Adjust where necessary.
As Muslim investors, we’re guided not just by profits, but by purpose. Our portfolios reflect our ethics as much as our economic goals.
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