The Economist has a column Rocks for the Long Run that discusses a new research paper showing great long-term real returns to hard commodities (agricultural commodities, not so much).
Besides having strong long-term returns, the article points out the very volatile price cycles. This is a good thing for long-term investors, because every down cycle is an opportunity to load up at low prices, and positions can be trimmed in the up cycles.
We were fortunate enough to sell a large position in the Pimco Commodity Real Return Fund (PCRIX) in mid-September near the QE3 announcement highs. We've been very slowly value-cost-averaging in since then. Once fully invested, we'll set up a semi-annual portfolio rebalancing between commodities, domestic stocks, and foreign stocks, to take advantage of the differing price cycles, trimming what's up and adding to what's down. We expect this strategy to produce lower risk, and quite likely higher returns, than a stock-only portfolio.
See also: In trashing gold, Warren Buffett makes the case for gold, and Gold and asset allocation: less risk, more return.