People like bonds in their portfolios because of the cash coupon that is paid every six months. One of the problems of owning bonds is that their value is eroded by inflation. One of the reasons for owning stocks in a portfolio is to give the overall portfolio a return better than inflation. This protects your real purchasing power of the portfolio. So how do you get the cash return of bonds and the inflation protection of stocks?
One way is to build a Bond Substitute portfolio. There are a number of blue chip stocks that have paid a dividend for 50 years or more. Many have paid for more than 100 years. From among this group, you can take those that have reliably increased their dividend for more than 10 years. You can buy 4 or 5 that pay dividends in January, April, July, and October. Then buy 4 or 5 that pay dividends in February, May, August, and November. Finally buy 4 or 5 that pay dividends in March, June, September and December.
You end up with a high quality diversified portfolio that should give protection against inflation by the increase in value of the stocks and provide you with a monthly dividend stream for your cash needs. It also protects you against having to realize capital gains and the resulting taxes from selling stock to produce your income.
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