I want to make monthly purchases of an S&P 500 index mutual fund. Most of the time (according to the numbers I looked at), if the index closes down for the day, the mutual fund's NAV will decrease at the end of the day. After all it's just tracking the index. So here's the question:
If I put in an order to buy shares of a mutual fund before market close (4 pm New York time), the order will be filled at the NAV that's calculated that day (according to my broker). If the S&P is about to close down for the day, I can be fairly certain that the NAV of the mutual fund will be down for the day, so I want to "time the market" with my buys and place my order a few minutes before the market closes. That way I can be pretty sure I'll buy in on the downswing.
Other things I thought of: there are, on average, 9-10 trading days with negative returns each month since 2001, so if I want to invest $99 (i.e. about $100), every time I buy during the month, I buy in with $11. I could make this more conservative in case there aren't 9 days with negative returns during the month, and just buy in on the first 5 trading days with negative returns each month.
Is this a good strategy? I'm wondering if this is something to do with long-term savings because over time, it'll build up slightly more (or maybe a lot more) shares in the fund than if I just bought in twice a month with each paycheck. I don't pay any commissions or loads to invest in this mutual fund, and it's expense ratio (.05%) is the same as the corresponding ETF.