Whether it is fatigue or sheer boredom, investors seem to be getting used to the recurring political drama in Washington over budget and debt issues. It wasn't exactly the Grand Bargain, but President Obama recently signed a two-year bipartisan budget deal that averted another potential government shutdown in January. There is still a potential showdown looming in February over raising the debt limit for the federal government, but financial advisors expect the markets will not be as jittery about the outcome this time around.
"I think it's going to be a sideshow, not the main event," Grecsek said.
The main event is the unwinding of the Fed's ultraloose monetary policy. The Fed, under incoming chairwoman Janet Yellen—expected to be confirmed this month—is likely to keep short-term rates near zero for some time.
However, the central bank announced a $10 billion reduction in its $85 billion monthly bond purchase program for January and is expected to further taper its purchases in the coming months. So far, investors have cheered the relatively modest change in policy, but they may get spooked by more reductions down the road.
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"There's no precedent for this. The Fed is an unnatural buyer in the market, and it's distorting the natural supply and demand for investments," Cortazzo said. "The best thing might be to rip the Band-Aid off, but no one wants to hurt the kid."
With asset valuations as high as they are, it's a good bet that the "kid" could get unruly—however smoothly the Fed executes the change in policy.
"I don't know when we'll see a correction, but we're preparing for greater volatility this year," Glassman said.
—By Andrew Osterland, Special to CNBC.com