Reuters The "good economy/incumbent wins" rule of thumb might not help President Trump as much as some expect, Morgan Stanley strategists wrote in a Monday note.

The bank warned that investors should prepare for either party to take the White House in 2020 and gauge which policies could come from either outcome.

Here are the three reasons why Morgan Stanley doesn't expect the "good economy" rule to guarantee Trump's reelection.

Visit the Business Insider homepage for more stories. Past presidential incumbents have typically won a second term if the economy has been strong. Trump might not be so lucky, Morgan Stanley strategists wrote in a Monday note. The 2020 presidential election serves as one of the biggest events affecting markets in the new year. A Trump victory would likely exacerbate his tariff-heavy foreign policy initiatives, while a Democrat taking the White House could bring new regulations to the health care and energy industries. The bank's strategists cautioned investors to prepare for either outcome and gauge which policies could come from either party winning the election. "Our take: be reactive, not proactive, and let plausible policy paths guide you," the strategists led by Michael Zezas wrote. "The most common misconception among investors we talk to is that solid economic growth assures the president's re-election." Here are the three reasons why investors shouldn't rely on the good-economy rule, according to Morgan Stanley.

Weak poll numbers Thomson Reuters Though the "good economy/incumbent wins" rule supports several election outcomes, a separate rule points to a different outcome. No post-war incumbent with a negative net approval rating has won reelection, and Trump's highest rating is still the lowest of any president seeking a second term. "We have no precedent for an incumbent with a good economy but weak poll numbers," Morgan Stanley said. Trump's approval rating has hovered around 41% since he took office in 2016. His current net rating, or midpoint, is -12%, Morgan Stanley said, citing FiveThirtyEight data. The last two incumbent candidates to lose reelection - Presidents George H. W. Bush and Jimmy Carter - had midpoint scores of -7% and 0%, respectively. A Trump victory in 2020 would signal economic strength is more important to voters than public approval.