CNBC: How can young investors diversify their portfolios?
Joe Terranova: It is important to diversify not only asset classes, but also geographical areas and strategies. Three levels of diversification.
CNBC: What is the difference between small and large capitalization?
JT: It is based on the size of the market capitalization. In general, small caps have a market capitalization of less than $ 2 billion. It is also important to hold mid-cap companies in a portfolio with a market capitalization between $ 2 billion and $ 10 billion.
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CNBC: What is a small capitalization of emerging markets? Small international capitalization? Why should young investors consider investing in them?
JT: Over the next 5 to 10 years, while investors expect low returns, alpha generation is essential. As an asset class, emerging companies and international small cap companies represent a potential potential for generating alpha for a portfolio. There are 3,000 national small-cap companies. Nearly 6 times beyond the United States for small caps. Great opportunity for diversification.
CNBC: Why do you think financial well-being is important?
JT: Financial well-being allows individuals to control their greatest asset, time. Take your time and create your own result with solid financial health.
Disclosure: NBCUniversal and Comcast Ventures Invest in Acorns.