Does anyone know some sources that discuss investing in stocks in halacha? There are many potential issues. For example, do you need to worry (about ribbis) if your money is used to lend with interest? Could dividends be a problem of ribbis? What if the company earns profit from basar b'chalev or from chametz over pesach? Also, would it make a difference if you invest in ETF's or mutual funds instead of directly in the stocks?
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The base case: the prohibition on interest is only if the principal is guaranteed. A business investment is just that -- I put in $1000 to help you open your pizza store and thus own a 5% stake in it; if your pizza store does well, I could make $500; if your pizza store fails, I could even lose my initial principal of $1000. The same is true for stocks, as I understand it. The next case (your first question): I buy stocks in Acme Financial, so now they're using my money (among others') to lend to Jews with interest. The Kitzur Shulchan Aruch Danny had cited says the "ownership" of that money depends on who's responsible for it: if the borrower defaults to Acme Financial, does Acme Financial turn around to me and say "sorry buddy, your money disappeared"? Or does Acme Financial owe me my money back from some other loan. My understanding is that if Acme Financial's overall value drops, I won't get back all of my investment (and they could tank so badly I could get back none of it); but as soon as I buy stock in them, they take responsibility for that money and seek to maximize overall return to investors as much as possible. I'd therefore read as the Kitzur Shulchan Aruch's case where it's the non-Jew's responsibility and therefore any proceeds are allowable to me. The prohibited case discussed would be where Jews pool their funds, go to a non-Jew and say "this is our money and if anything happens to it, we lose out; please go invest this", and the non-Jew turns around and loans to Jews with interest. That's different, if I understand it, from buying stock in a company. Chametz on Passover is a debate among contemporary authorities. For instance, Rabbi Hershel Shachter feels it is a problem and includes chametz stocks in what he sells to a non-Jew before Passover; Rabbi Mordechai Willig feels it's too far removed from ownership to pose a problem; you can't walk into a General Mills factory with your stock certificate and demand a box of Cheerios! | |||||
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An early source would be the Kitzur Shulchan Aruch 65:28 who says that even if some of the shareholder are Jewish, it would be forbidden to join, if they are borrowing from or lending money to Jews, and charging interest. סימן סה – הלכות ריבית סעיף כח מעותיו של ישראל מופקדים ביד עובד כוכבים, והלוה אותם לישראל בריבית, אם היו באחריות העובד כוכבים שאם יאבד החוב יתחייב הוא לשלם במעותיו מותר, ואם אינו באחריות העובד כוכבים אסור. ולכן במקום שיש קבוצות מעות (קופות חסכון) וכדומה שיש לישראל חלקים (מניות) שמה וישראלים לוים משם בריבית, אף על פי שהממונים המה עובדי כוכבים, מכל מקום נראה לי דאיסור גמור הוא. ולכן אסור ליתן לשם מעות (כי שמא ילוה ישראל שאינו הגון) וכן אסור ללוות משם, כי שמא נתן לשם ישראל שאינו הגון. | ||||
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