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Is it time to buy the iron ore miners?

It’s been a somewhat scary journey for shareholders in the mining sector so far this year – particularly in more recent weeks.

The iron ore price plummeted to its lowest point in five years at just US$77.50 – down 42.6% for the year – before recording its biggest one-day surge in more than two years earlier this week.

Investors certainly embraced the commodity’s 4.9% climb on Tuesday. In fact, they were so impressed that they bought shares of Atlas Iron Limited (ASX: AGO), BC Iron Limited (ASX: BCI) and Mount Gibson Iron Limited (ASX: MGX) en masse in the hope of catching the recovery. The three miners rallied between 13% and 18% that day.

The bigger miners also benefited with BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) both appreciating in price, too.

But it seems those celebrations may have come a little prematurely…

Shares in the sector are once again in decline after iron ore dropped more than 1% on Wednesday and a further 2.7% to US$80.32 a tonne on Thursday night. Not even another shipment record from Fortescue Metals Group Limited (ASX: FMG) was enough to stop its shares plummeting 6% yesterday and a further 0.7% today.

If you can’t stomach rollercoaster rides, then the mining sector probably isn’t for you either…

As we saw earlier in the week, some investors are eagerly predicting the bottom of this rollercoaster ride, but more twists and turns continue to present themselves which are enough to make even the biggest thrill-seeker sick in the stomach.

The fact is, it is impossible to predict when this wild journey will end, or where the iron ore price will settle. While some analysts have suggested it will drop to around US$75 a tonne in 2015, it could fall far below that level.

After all, most analysts had anticipated the commodity to trade at around US$120 a tonne in 2014, and look how wrong they turned out to be…

While there is no way of telling just how much more pain could be felt by the miners, investors would be far better off watching from the sidelines and waiting for the volatility to begin to subside.

In the meantime, there are far better opportunities to take advantage of in light of the market’s recent selloff…

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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