An approach to islamic investment decision making based on integrated Entropy and WASPAS methods

Year 2022, Volume: 1 Issue: 2, 100 - 113, 31.12.2022

Mustafa İşler Ahmet Çalık

Abstract

When investing in companies or indexes there is a high chance that some of these are not in accordance with Islamic principles which is a major source of confusion for many Muslims around the world. Since we cannot expect the general public to be well versed in the world of financial management, most of the information online is simple and can leave crucial information out, such as whether it includes things like interest or companies that deal with interest/sell alcohol. Investing in such companies is not allowed for Muslims and that’s why it’s important for Muslims to do the thorough research when engaging in investment matters. Fortunately, in recent years, Islamic investment opportunities have resurfaced with the increased development of Muslim majority countries and there is a variety of options Muslims can choose from when investing, such as, sukuks which are a type of bonds, certain regulated ETF’s and more. Therefore it’s important to use decision making methods when choosing which trades to make that are in accordance with Islamic financial management principles. This study will use the Entropy method to obtain the weights of the criteria and use the WASPAS method to rank the top investment decision, which in this case was A5.

Keywords

MCDM, Entropy, WASPAS, Islamic investment

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