During a recent “Ask the Traders” segment on Halftime Report, Virtus Investment Partners chief market strategist and CNBC Contributor Joe Terranova shared his recommendations about how young investors should be allocated. We followed up with Joe after the show for additional insights.

CNBC: How can young investors diversify their portfolios?
Joe Terranova: It’s important to diversify not just by asset class but also by geography and strategy. Three levels of diversification.

CNBC: What’s the difference between small cap and large cap?
JT: It’s based on market cap size, generally small caps are below $2 billion market cap. It’s important to also own mid-cap companies in a portfolio which have market caps between $2 billion and $10 billion.

More from Invest in You:
How to invest even when you don’t know the first thing about investing

Here’s how to figure out your net worth
Mutual funds and ETFs are quite different. Let us count the ways

CNBC: What is an emerging market small cap? International small cap? Why should young investors consider investing in these?
JT: Over the next 5 to 10 years as investor expectations are for muted returns, alpha generation is critical. As an asset class, emerging market and international small-caps are the potential alpha generation opportunity for a portfolio. There are 3,000 domestic small-cap companies. Nearly 6 times that beyond the U.S. for small caps. Great diversification opportunity.

CNBC: Why do you think financial wellness is important?
JT: Financial wellness provides the foundation for individuals to control their greatest asset — time. Own your time and engineer your own outcome with strong financial health.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

Products You May Like

Articles You May Like

Volkswagen recalls 679,000 US vehicles to fix electrical problem that could cause cars to roll away
Toll Brothers profit beat is clouded by weakness in orders
Target CEO: US consumer confidence ‘remains strong’
The economist who first linked the yield curve to recessions sees ‘pretty high’ chance of downturn
Fear needs to get more extreme for stocks to bottom, BofA’s Stephen Suttmeier says

Leave a Reply

Your email address will not be published. Required fields are marked *