Many mutual funds sell "asset allocation" products which include appropriately sized investments in a variety of asset classes meant for a prototypical investor. Some of these, such as PIMCO, even include direct commodity investments in the portfolio. Pension funds often base their investments on a model portfolio, which increasingly includes "alternatives" such as commodities. Wealth advisors and investment advisors are increasingly steering their clients towards including some small allocation to commodities, often touting the "diversification" benefits.
Question: Should the average investor be holding some commodities? Are these allocations in the interests of the client? Are there real diversification benefits to be had?
Both research/references and well reasoned arguments are welcome.