Granular portfolio, or granularity in investment, is a concept that encourages investors to build diverse portfolios of investments spanning multiple asset classes and sectors. This approach has become increasingly popular in the last few years due to its ability to reduce risk while still allowing portfolio customization to meet an investor's financial objectives.

The primary advantage of a granular portfolio lies in its diversification. By diversifying across asset classes and sectors, an investor reduces the risk of large losses in any single investment, as well as any single sector or asset class. For example, diversifying a portfolio between stocks, bonds, mutual funds, commodities, and/or foreign investments can reduce the impact of a dip in one particular sector. Diversification also allows for potential gains in any one investment to be distributed among other asset classes and sectors, so that a single windfall gain does not fuel the entire portfolio.

Another advantage to a granular portfolio is its ability to be customized for the specific financial objectives of the investor. Since the investments are split into multiple asset classes, the investor is able to create a balanced portfolio that meets their financial goals, such as income generation, capital preservation, growth, or income utility.

Finally, a granular portfolio allows for greater flexibility in the amount of diversification used, which means that an investor has the freedom to choose the number of investments they require or are comfortable with. This flexibility is also beneficial to investors seeking to create a portfolio that is tailored to their specific risk tolerance.

Unfortunately, like all investments, a granular portfolio has some disadvantages. For one, the portfolio may potentially lose out on any windfall gains that occur in any particular asset class or sector. In addition, during periods of market volatility, the exposure to increased levels of risk can be higher than with a portfolio that is less-diversified.

Ultimately, a granular portfolio gives investors many advantages and the ability to manage risk while still creating a portfolio of investments that is tailored to their financial objectives. While there are some disadvantages to consider, such as potential for losses and increased volatility during periods of market volatility, its ability to reduce risk through diversification and to allow for portfolio customization outweighs the risks associated with it. As such, it is an attractive option for investors of all levels and risk profiles.