This article, The Art of War(chest) was originally posted here. The writer is a veteran community member on InvestingNote, with username known as theintelligentinvestor. I have seen frequent discussions on the amount of cash we should be holding as warchest and opinions varied widely. Some are fearful of today high market in overseas markets and advocate for 100% cash, while others see good values in STI market and maintain a high percentage invested in the market. Questions asked are often the optimum level of warchest to achieve the maximum returns. I been thinking about this and want to pen down my thoughts. One approach is to determine what is the expected value (EV) using the probability of an event happening. Then based on some reasonable assumptions to work out the two extreme cases of All Equity or All Cash. For the case of All Equity, the market in the long run ......