Our currency says “In God We Trust.” It does NOT say “In Cash We Trust!” There is nothing sacred about cash. It is just another asset class.
But, it is an asset class that impacts the rest of the portfolio. Too much cash limits portfolio growth, in the long run. Too little cash limits portfolio losses, in the short run. (If you are so scared of short term market gyrations that you cannot sleep, then you are too timid to be a long term investor anyway.)
As a portfolio manager, I see cash as insulation, like you have in your attic. It stays the same year-round, about 5% of the portfolio, even in the face of recessions, which come and go. However, I do like greater insulation in the face of a financial crisis and try to increase cash then, to maybe 25%. That gives a little “dry powder” for when the crisis passes, which it will.
There is nothing sacred about cash. It is neither friend nor foe. It is merely a portfolio tool to maintain minimal liquidity and insulate risk over the long term. Love your portfolio, not your cash!