The weekly Chart of the Day graphic details the average election year return for the Dow Jones Industrial Average. In the commentary to the chart they note:
With the 2008 presidential campaign now in full swing, today's chart illustrates how the stock market has performed during the average election year. Since 1900, the first five months of the election year have tended to be choppy. That choppiness was then followed with a rally right up to the November election. One theory to support this election year stock market behavior is that the first five months of choppiness is due in part to the uncertainty of the outcome of the presidential election (the market abhors uncertainty) with the market beginning to rally as the outcome of the election becomes increasingly evident.
(click on chart for larger image)
Source: Chart of the Day
If history provides any clue to the future, the markets could be in for a bit of a bumpy ride in 2008.