Cash is flooding into municipal bond mutual funds at a record pace as investors become more comfortable taking on risk and spiriting money out of safe havens. A heartier risk appetite in financial markets has lifted a broad spectrum of asset classes.

The Standard & Poor's 500 Index, pummeled all of 2008 and the beginning of 2009, is now up 32% since March 9. A barrel of oil trades at around $58 after languishing around $40 earlier this year. A measure of volatility known as the VIX, which was as high as 56 earlier this year, has subsided to 31.

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