I'm 25 and have been diving deep into value investing over the past year or so. One thing I'm struggling to fully understand is the role of cash in a personal portfolio vs its role in a value framework. I'm torn on the 'cash is optionality' rule. I want to wait for fat pitches, but watching my savings get eaten by inflation while I sit on the sidelines feels like a massive opportunity cost.
To those who have been doing this for a while, do you keep your emergency fund totally separate from your 'dry powder'?
Do you you target a specific cash % , like 10%, or do you just let it build up?
How did you guys handle this when you first started out?