Renowned bond investor Bill Gross, co-founder of Pimco and also known as the bond king, recently shared his perspective on the upcoming U.S. presidential election in an interview with the Financial Times. Gross believes that a win by President Donald Trump would have a more bearish impact on bond markets compared to a reelection of Joe Biden.

Gross attributed his assessment to Trump's proposed policies, which advocate for continued tax cuts and increased spending. According to the bond guru, these policies would likely lead to more expensive commodities and contribute to a bearish sentiment in the bond market.

Despite acknowledging that Biden's administration has already been responsible for significant deficit spending, Gross went on to assert that Trump's election would be even more disruptive. He expressed concerns about the growing deficit, estimating an annual increase of $2 trillion in supply, which could exert pressure on the market.

Gross recently declared that the "Total Return" bond investment strategy he helped create in the late-80s is no longer viable. Instead, he recommended investing in a closed-end fund focusing on preferred securities, contingent capital, and allocating up to 20% to private credit.

Turning his attention to the stock market, Gross cautioned investors to manage their expectations and not anticipate a repeat of 2019's impressive 24% return on the S&P 500. He believes that market prices will likely "mean revert" over time, implying that future increases will be less pronounced.

As the presidential race intensifies and with November drawing near, Gross's insights have garnered attention among market observers. Investors will likely heed his words as they navigate the uncertainties surrounding the election and make strategic decisions to safeguard their portfolios.

The impact of the election on bond and stock markets remains a topic of scrutiny, with experts like Bill Gross providing valuable perspectives. Market participants eagerly await the outcome of the election and its subsequent effects on the financial landscape.