When we launched a dashboard of all the Investors’ Chronicle’s annual stock screens earlier this year, it was envisaged as a handy reference point for all the stockpicking styles and methodologies discussed in these pages.
What I didn’t expect was for it to inspire feelings of mild dread. But in the past few months, that’s what has happened, as the ever-worsening condition of this issue’s screen – our High Yield Small Caps method – loomed out of the table with each weekly refresh. In the pre-dashboard days, a screen’s performance was only revealed at the end of a year. Now, the real pain spots are documented in near-real-time.
While studies have shown that over-checking one’s investments increases our innate tendency towards loss aversion, thereby leading to over-trading and poor decision-making, we are bound to our screen rules. That means annual refreshes, sticking to a methodology and avoiding the temptation to meddle.