Fractional Kelly
The practitioner adjustment to full-Kelly sizing that risks a fraction (typically a quarter to a half) of the mathematically growth-optimal fraction in order to trade some long-run growth for substantially reduced drawdowns and greater behavioral durability. Half-Kelly typically captures around 85% of full-Kelly's long-run growth with about half the drawdown; quarter-Kelly captures less growth but is far more survivable through edge mis-estimation and fat-tailed return distributions. Most professional fundamental investors size positions in the quarter-Kelly to half-Kelly range. The right fraction is empirical, not theoretical.
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