A mutual fund is always a good choice for long term investment because it gives you the chance to make much better returns than other investments, while minimizing risk (market risk is reduced by being long term, and investment risk is reduced by diversification inherent in a good mutual fund).
Buying a MF when it is down may actually give you a chance to get the funds on sale, so I would not worry about that.
The bigger problem is that past performance does not guarantee future results. In fact, recent outperformance may be a sign that underperformance is in the future. Studies have shown that it is extremely difficult to be in the top tier of a fund's peers for multiple years in a row. That is why I choose funds that have low expenses. While low expenses do not guarantee future performance, choosing a fund with high expenses will definitely cost you in the future. I use mostly index funds through Vanguard, because their expenses are among the lowest available.
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