Can We Believe the Polls?

by Greg Valliere, AGF Management Ltd.

MOTION SICKNESS: Time for Dramamine — is Joe Biden ahead by 12 points or 4? CNN says the latter, the Washington Post says the former. The polls are still another wild card in this crazy year, which has Donald Trump praising CNN’s poll and criticizing Fox, which shows him trailing by 7 points.

THERE ARE NUMEROUS VARIABLES that make the elite polls different from each other — how many respondents are definitely planning to vote? How many are “leaners?” Who’s “persuadable?” How many respondents are Republicans? How many are Democrats? When were the polls taken — changes in the news cycle (such as concern over the post office) can change poll results literally overnight.

RATHER THAN look at the dizzying differences in methodology, we simply recommend the Real Clear Politics aggregate of all polls. It shows Biden ahead by 7.7 points this morning, which feels about right — but even this number could be off by a point or two, so we pay the most attention to the direction of this number.

WHAT THE DIRECTION SHOWS is that the race has tightened a bit, but we’re not aware of any serious political analyst who thought Biden was really ahead by 14 or 15 points, which some polls showed in July.

FOR INVESTORS, IT’S PROBABLY NOT WORTH spending a lot of time on the polls until a few days after the conventions; the GOP convention ends on Aug. 27. We wouldn’t be surprised to see Biden add a decent “bump” — maybe two or three points — after the Democrats’ convention, which got off to a solid start last night.

BUT TRUMP AND HIS ALLIES will have a field day next week, blasting Biden’s agenda, which has veered sharply to the left. Advocating massive tax increases has never been a winning formula, so we wouldn’t be surprised to see a bump for Trump by Labor Day.

BIDEN NEEDS A 6 OR 7 POINT LEAD THIS FALL: Three or four points of his lead could come just from California and New York, where he will win landslides. And most polltakers have at least a 3% margin of error. And some respondents may be reluctant to say they’re voting for Trump. So if Biden’s lead slips to 4 or 5 points this fall in the aggregate of all polls, he could be in trouble — especially if “battleground” states tighten further.

ONE THING IS CERTAIN: This is an uber-volatile political year — so volatile that Charlie Cook, the country’s leading handicapper, has shifted South Carolina’s Senate race to simply “leaning” to Lindsey Graham; it’s no longer a safe seat for the GOP in this very conservative state. If Lindsey Graham is vulnerable in South Carolina, anything can happen in November.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI is registered as a portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

© 2020 AGF Management Limited. All rights reserved.

This post was first published at the AGF Perspectives Blog.