I'm with rpr - do whatever helps you sleep better at night. In the long run it probably won't make much of a difference. By waiting for a "market dip" you are indeed timing the market. It could dip tomorrow, it could go up for 5 more years... no one has any way of predicting the future. What if you split the money ($1K toward principal pay down, $1K toward index funds)?
Personally, I have roommates that pay my mortgage w/ the rent money that comes in so I don't pre-pay my mortgage(s).