How to buy and invest in Barclays shares

Buying Barclays stock: how to invest

1. Research Barclays shares
2. Open an online share dealing account or download the IG Invest app
3. Decide how much capital you want to invest
4. Make your investment

How much will it cost to buy Barclays stock?

What to consider before buying Barclays shares

Investing in stocks comes with risk and losses could exceed your initial margin. To help prevent this, it’s important to develop a clear investment plan before buying Barclays stock. Here’s a few things to consider:

Understand your financial goals

Clearly outlining your long and short-term goals can help you determine the amount of money you’re looking to allocate investing and how long you plan to invest in Barclays shares before selling and hopefully taking profit.

Investing carries risk so it’s important to be prepared for the possibility of losing money.

Know when you’ll need the money

Investing in Barclays stock provides the potential for capital growth as the increase in its share price could offer higher returns than cash savings which solely relies on interest rates.

For optimal results its recommended that you hold Barclays shares for at least a decade, so it’s important to consider your financial timeline. If you think you’ll need the money within the next few years, then shorter term alternatives like bonds, trading or high-yield savings accounts may be a better option. If you’d still like to invest, then opting for lower risk stocks is advised.

Most analysts view Barclays stock as a medium risk investment. As with all banking shares, Barclays stock is highly susceptible to economic turmoil and tends to perform less well in periods of recession due to the increased possibility customers may default on their loans.

Although no longer considered too big to fail, Barclays is one of the largest banks in the UK which means that it’s less likely to be impacted by periods of economic uncertainty than smaller banks.

Know how much risk you can take

Financial markets are frequently subject to volatility and there’s always the risk your losses could exceed your initial capital. To help manage this risk, it’s important to make sure that you have an effective risk management strategy in place.

Here are some ways you could manage this risk:

• Invest in a range of stocks from different sectors and varying levels of risk
• Hold Barclays stock for at least a decade and look to build wealth over time
• Monitor the financial markets closely and track any macroeconomic events that could influence Barclays stock

How to research Barclays stock as an investment

One way to analyse Barclays shares is to conduct fundamental analysis of the company. Fundamental analysis is based on external influences, as well as financial statements and industry trends. Because there are so many elements of the Barclays business to consider, a good starting point is to use ratios to assess the share price value. Important ratios include the price-to-earnings (P/E) ratio, the return on equity (ROE) and the relative dividend yield.

P/E ratio

By calculating Barclays’s P/E ratio, you can establish how much money you’d have to spend on shares to make £1 in profit. This is calculated by dividing the market value per share by the earnings per share (EPS).

Once you’ve established Barclays’s P/E ratio, compare it to the ratios of its competitors. A low P/E ratio could be an indication that Barclays shares are overvalued, while a high P/E ratio could imply otherwise.

Return on equity

Barclays’s return on equity (ROE) measures return on shareholder capital. ROE is expressed as a percentage and can be calculated by dividing a company’s net income by stakeholder equity. A low ROE could be an indicator that a company’s shares are overvalued. This is because, a low ROE would show that Barclays is not generating a lot of income relative to the amount of shareholder investment.

Dividend yield

Dividend yield indicates the return an investor would make from Barclays stock based on dividend payments alone. This is calculated by dividing Barclays dividend per share by its share price.

If the dividend stays the same, it’ll fall when the share price rises and vice versa. This means a higher dividend yield isn’t always positive as it could indicate a drop in the share price.

Why buy Barclays shares

Barclays is one of the largest banks in the UK and is an attractive investment choice if you’re looking for exposure to the UK financial sector.

Barclays’ business model follows a two-pronged approach with two well-balanced divisions. A UK retail banking franchise best known for its stable deposits and an international wholesale banking unit which offers higher growth investment services.

This diverse business model hedges against regional economic uncertainties and allows for cross-selling opportunities with the US and provide revenue streams that come from countries other than the UK.

On top of this, the company offer frequent dividend payments and share buybacks which provide an attractive opportunity for capital growth.

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What to do after you buy Barclays shares

After buying Barclay’s shares, it’s important to regularly track its performance using our app or web platform. Staying up to date with market movements enables you to proactively respond to any opportunities or risks that may occur.