Contrarians buy on bad news, and sell on good news. “Buy low, sell high” is a well-known cliché. That’s how an investor must think in order to profit from stock investing. All stock-market investors embrace the motto "Buy low, sell high." But few act accordingly. The herd mentality restricts us from pursuing a contrarian investment strategy, though it consistently beats the market. There are proven techniques for selecting undervalued stocks which are rarely followed.

The contrarian strategy advises you to pay a cursory look at a company's business fundamentals, stocks trading at below-market multiples of EPS, cash flow, book value, or dividend yield before taking an investment decision. Historically, stocks that are cheap by any of the above measures tend to outperform the market. To do contrary, you would require to go against the crowd, buying stocks that are out of favour and sell a few of Dalal Street’s darlings. This requires overriding powerful instincts.

Investment clubs are formed by people who pool in their money to invest in stocks, bonds, mutual funds and other investments. The appeal is simple: A club has the funds to diversify its investments better than an individual and the knowledge base is wider. Investment clubs can be formed between family, friends and people who work together. However, forming a club with co-workers is a lot easier. But bear in mind that the biggest complaint among club members is finding a convenient time and place to meet each month. Forget not, you can talk about club news over the water cooler or canteen too. To form a club

First step, send out a memo or email asking select members to come to an introductory meeting. During that first meeting, discuss monthly dues. How much can people afford?

Secondly, give members a profile personality test to see where everyone stands. Are they risk takers or conservative investors? Club members should be compatible when it comes to investment goals.

Make sure you recruit people who are truly committed, which means meeting once a month and sharing the workload when it comes to researching companies, picking stocks and reviewing the club's portfolio.

It's common for members to get impatient and to jump ship shortly after the club's formation. Alternatively, member participation tends to drag due to a personal or financial crisis arises. The first few years are the crucial building blocks of a club. Members who survive the two-year hump tend to hang on for the long haul -- 20 years or more. Still, every club must prepare in its bylaws how to bring in new recruits and handle departing members who want to cash out.