In the recent Ask the Traders segment on Halftime Report, Virtus Investment Partners' chief market strategist and CNBC contributor Joe Terranova presented his recommendations on how young investors should be allocated. We followed Joe after the show for additional information.

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.