Iron ore price, page-35066

At the risk of sounding facetious, allow me to advance the theory that the share price today is actually almost irrelevant to the proposition of whether or not one can make money in FMG over the medium term....
Without boring anyone with the mathematics of it all - you can easily prove this yourself in a few minutes with a pencil and paper - a purchase today of, say, $25000 worth of FMG at $22.55 (as of this moment) would yield around 1100 shares.
If we assume the following worst case scenario:
1. A dividend of $1.75/share annually over 5 years - about half of the current dividend.
2. A franking credit of $0.75.
3. A period of 5 years holding.
4. A sale price of $11.25 in 5 years - half the purchase price.
Following the above horror scenario, we still end up ahead way ahead of money in a term deposit - even assuming 0.75% pa over that time frame (not likely, imo) - and obtain a handy loss for tax offsets.
With performance likely to be way better in reality over the term considered, it's almost impossible to lose unless one panics over the odd day to day movements even though markets have always only gone up in the longer term.
Perhaps some are better suited to term deposits, or safer still, under the mattress....