Should You Buy BT Investment Management Ltd At This Share Price?

What happened to the BT Investment Management share price

BT Investment Management Ltd [ASX:BTT] suffered another huge drop today, giving up about 5% in its share value.

Why did BT Investment Management shares do this?

The once beloved growth stock is now locked in a sharp correction downward. There are two types of risks investors need to consider when it comes to investing in a bear market — individual stock risk and systematic risk (market risk). While systematic risk has definitely played a role in depressing stock values across the board, the sharp correction in BTT is something different. It reflects more of the individual stock risk in BTT.

What now for BT Investment Management Ltd?

In my trading portfolio, I have been limiting my exposure to BTT. In terms of trend growth, BTT actually hasn’t done too badly relative to some of the other stocks. However, it is the sharp deterioration and its associated effect on portfolio risk that is the most undesirable feature.

BTT tends create return as a momentum stock and it has clearly lost its momentum over the last few weeks. I suggest having a very limited exposure to the stock for short term investors. In terms of the long term performance of BTT, we will need to wait and see.

Ken Wangdong

Emerging Market Analyst, New Frontier Investor

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