> Rebalancing the portfolio to other asset classes smells a lot like timing the market.

Rebalancing is not timing the market, unless you're changing your ratios.

Let's say I want 80% equities and 20% cash. The market bombs, and now I have 50% equities and 50% cash. If I thought all the information was already priced into the market, then reallocating to get back to 80/20 makes sense. Not rebalancing would be more like timing the market, because I would be assuming that the current value doesn't represent some "true value" of the market.

> The question still remains: When would you move to other asset classes?

Somewhat regularly, but not constantly because that takes time and has transaction costs. The specific time doesn't matter.

> I'm sure there were time periods when holding cash was your best option.

Definitely, it's just very very hard to identify which periods they are until after they've happened.

(Home currency) cash is essentially an ultra-short duration, zero yield (home government) bond.

Edit: Clarified that both are local.

No it's not. Currencies move against one another all the time. Your yield is only zero against the same currency, but it doesn't mean your yield is zero in terms of actual global buying power.

FOREX movement doesn't factor here? I'm talking about a single currency.