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A significant part of investments in financial tools of the stock market does not provide the expected and planned result for reasons beyond the control of investor. An absurd or poor-quality investment analysis causes most of the cases resulting in losses. Against the backdrop of globalization and a certain “mutation” of the financial market, the need for new and advanced methods for the theoretical description of the mass expectations of financial market participants has grown, with possible further modelling of quotes on this basis. This paper, titled “A Reductive-Investment Analysis”, describes the results of long-term, empirical studies of the financial and stock market. It represents a new, alternative approach to assessing, analyzing and modelling in financial markets using logical techniques and such statistical software tools as a regression channel, calculated based on the least squares method.

A Reductive-Investment Analysis is a system of logical and practical approaches, methods of analyzing financial tools of the stock market (securities, currencies, derivative contracts, etc.), for the investor, substantiating and evaluating the feasibility of making investments, and optimizing investment trading operations, to make an effective decision. It is a dynamic process occurring in two planes – time and price. In the time plane, the work is carried out to monitor market expectations. They provide a steady understanding of the process of developing investment objectives. In the price plane, analysis and development of descriptive solutions in different substantive aspects are mainly carried out. These aspects include the econometric component, correctly stated objectives and tasks of investment, analysis of investment risk, and the general sensitivity to changes in certain significant factors.

The principle of the Reductive-Investment Analysis as a whole is a method to narrow the complexity one down to the simplicity, by means of logical-methodological procedures of presenting a complex process as a sequence of simple techniques. This method makes it available for analysis.

The process of Reductive-Investment Analysis comes laden with descriptive methods of converting data associated with a particular stock exchange tool in order to simplify it and present it by means of some more accurate language, as well as to model the investment objectives.

The subject matter of this analysis as a practical method is that for the solution of a complex task, the researcher narrows its structure down to a simpler version available for analysis or solution. For example, the solution of a matter in mathematics can be narrowed down to another matter, if the solution of the first one can be the solution of the second one. In logic and in the methodology of science, the reduction is usually refers to the explanation of the theory or a variety of experimental laws established in one research area, using the theory formulated for another one.

Methods and techniques of Reductive-Investment Analysis are the means for an objective research of the processes in the investment area, as well as the formulation of conclusions and recommendations based on them. The procedure and the applied methods of this analysis are aimed to propose alternative options for modelling possible processes, identifying the scale of proposed events and their actual comparison according to various efficiency criteria.

The objects of the Reductive-Investment Analysis are financial and stock tools, which are traded within online international stock exchanges.

The subjects of this analysis are users of analytical information directly or indirectly interested in the results and achievements of investment activities, owners, management, personnel of financial organizations, suppliers, buyers, creditors, the state represented by statistical and other bodies analysing information in terms of their interests to make investment decisions.