Regular investing is particularly helpful if you’re nervous about risking a large amount of money up front or if don’t have access to a lump sum. You can get started from as little as £50 per month.
Four ways regular investing can help you sleep at night

Four ways regular investing can help you sleep at night

If you’re nervous about investing, regular investing might be for you.

How regular investing can help
So you’ve done your research and you’ve picked a fund that matches your investment goals. Now it’s time to put your money to work. If you’ve got a lump sum, you might be tempted to invest the whole lot in one go.

But you also have the option of drip feeding your money into the fund which means investing smaller amounts on a regular basis. It’s worth considering this approach so here’s what you need to know. 

Balance risk

By investing regularly, you hope to average out the price that you pay for the units or shares that you buy in the fund.

Sometimes the average price works out lower than the price you pay if you invest a lump sum in one go but sometimes it can be higher.

Say you invest £100 each month over five months. The share price in the first month is £25 but drops to £20 in months two and three before recovering to £25 in the last two months. You end up with 22 shares at an average price of £22.73.

Regular investing​

Lump sum

Share price Shares Purchased Share price ​Shares Purchased
​Month 1 £25
​4 ​£25 20​
​Month 2
​£20 ​5
​Month 3 ​£20 ​5
​Month 4
​£25 ​4
​Month 5
​£25 ​4
 Total
22 Total 20
​Average price/share £22.73 Average price/share £25


Of course, the opposite can happen too. If the share price increases to £30 in months two and three, you find yourself with 18 shares at an average price of £27.78.

Regular investing​​

Lump sum

Share price Shares Purchased Share price ​Shares Purchased
​Month 1 ​£25
​4 ​£25 20​
​Month 2
​£20 ​3
​Month 3 ​£20 3
​Month 4
​£25 ​4
​Month 5
​£25 ​4
 Total
18
  Total 20
Average price/share £27.78 ​  Average price/share £25


In reality, prices may fluctuate more than this, moving above and below the price when you first started investing. The important thing to remember is that regular investing doesn’t guarantee gains, it simply reduces the risk of buying the fund at a high price. You might end up with a price that’s higher or lower than the starting price by investing regularly. But even if you end up paying less, you will still lose money if the value of your investment falls.

No need to time the market

Buying low, known as ‘timing the market’, is tricky. Nobody can predict when a share price has hit rock bottom. However this is less of a concern when you make regular investments. You generally continue to invest regardless of whether the price moves up or down.

What’s more, you aren’t fully exposed to the market. So if the fund drops in value, your losses should be smaller than if you invested a lump sum. If it rises though, you could miss out on potential gains.

Bear in mind that whatever approach you take to investing, your money is at risk. The value of a fund can fall as well as rise and you may not get back the amount you invested.

Transparent fees

When you invest in a fund though our stockbroking platform, you usually pay a Fund Administration Fee on your holdings. When you invest regularly, we’ll waive the minimum fee of £35 per year and only charge you 0.35% of your holdings, no matter how small. And like all of our fund investors, you don’t pay initial charges or dealing commissions.

You’ll still have to pay the Ongoing Charges Figure (OCF) which includes the Annual Management Charge (AMC). Make sure you read a fund’s Key Investor Information Document (KIID) before you invest so you fully understand the fees and charges.

Tax-efficient investing

Before you start investing, make sure you take full advantage of the tax benefits offered by an Investment ISA. Please bear in mind though that tax rules affecting ISAs may change in the future. Their value to you will depend on your personal circumstances.

An Investment ISA also offers what’s known as a ‘cash park’ facility. This means you can hold cash in it (earning interest) until you’re ready to invest, making it well suited to regular investing.

Learn more about regularly investing into an ISA

Get started

Regular investing is particularly helpful if you’re nervous about risking a large amount of money up front or if don’t have access to a lump sum. You can get started from as little as £50 per month.

Find out more about setting up regular investments with Barclays Stockbrokers. You can also explore the different investment accounts we offer.

If you’re already a client, then login to your account.

Please wait …