The argument that the U.S. election will have Brexit-like effects and that investors should invest heavily in a major market dip should be approached with caution, economist Mohamed El-Erian told CNBC on Monday.
"I would caution about the Brexit argument. The Brexit argument is go in there immediately because it will bounce back fully. Be careful, this is a little bit different," El-Erian said. "The U.S. is systemically much more important than Britain is and there's lots of other uncertainties."
Instead, El-Erian, chief economic advisor at Allianz, recommends a more cautious approach if there were a sweep for either side, which would counter the widely held prediction of a Hillary Clinton win with Congress remaining in gridlock.
"I would deploy capital slowly. I wouldn't go all in on Wednesday morning after a big loss if there was a sweep one way or the other," he told "Squawk Box."
A sweep, El-Erian continued, could warrant a market overreaction. The market would likely open lower and generate buying opportunities, he said, causing "more popular names" to sell off quickly.
Overall, the key, according to El-Erian, is to have cash on hand and be cautious in responding to market movements.