Long before the Dow hit 14,000, a number of big money managers predicted the rally—and have ridden it to handsome returns.
Hedge funds like Omega Advisors, Jana Partners, and Third Point have all been long certain equities in recent months, said investors and people familiar with their strategies, and have been buoyed by the market's climb. (Read More: Dow Breaks 14,000 Finally; What's Next for Market.)
"Equities generally are the place to be," said Omega chief executive Cooperman in a CNBC interview last October, echoing a notion he'd espoused for a number of months. "We have plenty we think are still attractive."
So attractive, in fact, that his offshore fund finished the year up nearly 30 percent, according to investors and someone familiar with the performance, and is up another 5 or so percent year-to-date through January.
Jana and Third Point, which describe themselves as event-driven funds and look for long-term stock buys, also benefited from the stock-market momentum. For 2012, said people familiar with their results, both companies saw upside of about 21 percent in their flagships. For this year through January, they are up about 5 percent, these people add. (That said, a recent downturn in Constellation Brands, of which Third Point is reportedly a big holder, could potentially put a dent in its 2013 numbers. A spokeswoman declined to comment.)
The bigger question now is whether the U.S. markets can sustain such lofty levels. In a research note to investors, Merrill Lynch strategist Michael Hartnett reportedly warned of a potential correction, and large money managers are warning of near-term choppiness. (Read More: Money Pouring Into Stocks 'Is Usually a Negative Sign'.)
"The market will continue to be volatile," said Daniel Gamba, who heads BlackRock's institutional iShares exchange-traded funds business.
"Some of the macro risks that have not been fixed … as well as some of the banking issues in Europe" could inject "some volatility into the flows," he added, "which means we see some correction." He said to look for volatility in particularly in emerging markets, where both stocks and sovereign debt have been popular investments of late.
Cash has been moving from the sidelines and into stocks, asset managers and bank executives said. Last month was the best January ever for global ETFs, which saw $42 in inflows; at the same time, equity-fund inflows for the week that just ended of nearly $19 billion were the third-highest ever, according to Merrill's Hartnett. (Read More: Even Dow 14,000 Won't Lure Many Off Sidelines.)
But traders and money managers posit that after many years of investor caution, significant institutional money hasn't yet been reallocated from bonds to stocks in a meaningful way, and that an even stronger Dow rally will take off if that happens.
—By CNBC's Kate Kelly; Follow her on Twitter: @KateKellyCNBC