Modern currency like USD is not intended as a store of value, it's intended to facilitate transactions. You should only have it when you need to do transactions. Otherwise you should be invested in assets that you believe will grow over time.
There is no reason to believe the value of USD will grow over time. It's not backed by any commodities and the government prints more of it as it sees fit, with a target inflation rate that's intended to devalue the dollar over time, by design.
In other words, dollars are good for convenient transactions, but you generally wouldn't buy them as an investment.
> it's not impossible to purchase something beyond its fair value.
By definition the price at which an asset trades is the fair value.
> Ray Dalio mentioned his confusion about markets not crashing when he was young because the dollar became untethered from gold a second time in U.S. history, and he later realized buying assets when central banks print was a "rhyme" in economics history--these events don't repeat perfectly, but similar situations occur over time. In his case, it was a repeat event.
The entire world economy is a fiction, but that doesn't change how it works. A lot of "gold bugs" had to learn this the hard way. The entire world is invested in this fiction.
> It's so pervasive that you get studies put out by financial institutions saying you're better to always be fully invested, and to never set aside cash.
Because it is. Dollars are for transacting.
> If you refused to buy when general equities were historically high at any point in time and held on to cash while eating inflation, when market prices came down and you bought ... That's NOT MARKET TIMING.
It is market timing, but trying to time the market can be fine. People say "time in the market beats timing the market", and that's true on aggregate, but there are personal reasons why individuals may want to take on additional risk by trying to time the market for greater gains.
> The whole attitude industry-wide is gross and conflicting to me.
Yes.
> Buy low, sell high! Buy and hold forever! Yeah, but what is "high"? And why would you hold something that is dying?
Don't do this. Buy assets that you believe will appreciate over time relative to other assets. In other words, try to make good bets.
If your bets are working and will continue to work, or you believe your bets will work over time, then keep holding and borrowing as you need dollars.
If you believe you've made a bad bet, take your losses and reinvest into hopefully better bets.
Taxes are a big factor in the decision to sell, but generally, you want to borrow instead of sell when you can.
> I feel like the pop literature available to the public that is digestible covers some reasonable concepts but I think there are studies that either haven't been independently recreated to back simple common questions for the above average person, or they haven't been performed at all.
This has nothing to do with studies. The US Dollar is designed to lose value relative to other assets over time. You have to allocate your dollars into other assets to mitigate this effect.