Citigroup (NYSE:C) has been on a tear the past two days, rising 5% after hedge fund manager David Tepper spoke out about his confidence in stocks earlier in the week. Dubbed the "Tepper Rally," the bull market following his comments, especially within the financial sector, really boosted Citigroup -- which is Tepper's largest holding in his Appaloosa Management fund.

Hedge fund madness
But the bank is having a hard time holding on this morning, as news of Appaloosa's most recent 13F filing shows the fund reduced it's position in Citi during the first quarter. Cut by 7.3%, Appaloosa's stake in Citi is still its largest holding at 8.5 million shares, but the fund also reported options that would allow it to further reduce its share count in the future. The fund also reduced its shares of JPMorgan Chase (NYSE:JPM), though its position in that bank is much smaller than in Citi.

Both banks are also in the headlines for the changes in George Soro's fund. During the first quarter, Soros eliminated the fund's positions in JPMorgan and Morgan Stanley (NYSE:MS), while reducing its stake in Citi by 7.6 million shares.

Though Citi investors may be concerned about these two funds cutting their positions in the bank, there's little reason to fret -- Citigroup has joined a new club: the Hedge Fund Darlings. Citi is now among the favorites of money managers, with many new funds adding positions in the bank. AIG (NYSE:AIG) had a similar calling in late 2012, becoming the No. 1 hedge fund favorite. The insurer has risen 24% so far in 2013, giving some credence to the funds' fondness for the recovering titan.

In other news
Banks are on high alert today as the Commodity Futures Trading Commission members will be voting on some pared-down rules for credit-default, interest rate, and commodity swaps. If approved, the rules will essentially roll back the Dodd-Frank rules that had tried to change the markets by increasing competition.

In a push to increase transparency and decrease costs and risk, the new rules would help institutions see pricing on a real-time marketplace. With Citigroup, JPMorgan, Morgan Stanley, Bank of America (NYSE:BAC), and Goldman Sachs controlling 95% of the swap transactions in the U.S., this is a huge win for the American banking sector.

Investors of all shapes and sizes
It's exciting to hear that well-known money managers believe in the same stocks that you have in your portfolio. And it can be even better when the markets react positively to their sound bytes, pushing your stock higher. But it's important to realize that the momentum gained in one day can easily reverse on the next. If you hold Citigroup stock, don't be concerned that some funds are cutting their positions -- there are plenty of reasons that may have been the best move for their investors. What's the best move for you? Look at the long-term prospects of your investment, follow the company's progress quarterly, and stick with your initial investment thesis until it no longer applies.

Fool contributor Jessica Alling has no position in any stocks mentioned -- you can contact her here. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group, Bank of America, Citigroup, and JPMorgan Chase. and has the following options: Long Jan 2014 $25 Calls on American International Group. Try any of our Foolish newsletter services free for 30 days.

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