I think it might work, but includes enough dangerous assumptions for me to hesitate. My thought process:
1. VTSAX already includes small cap stocks. You don't need to do more than that.
2. VSMAX is more volatile, but how do you know that will work in your favor? If the market goes down some more, you could lose instead of win.
3. How will you decide when the right time to sell is? Any strategy that assumes you can "tell" or "see" prices by "common sense" is harder than it looks.
4. One way of benefiting from volatility is to maintain a fixed % of two separate indexes and periodically rebalance to that %. For example, 80% VLCAX and 20% VSMAX. But then you never sell all the way out, you just rebalance to 80/20 every year (or quarter).
5. VTSAX doesn't do that exactly, but comes close. Already. Automatically.
With all that said, my guess is that you would get a slight advantage from your plan. And if you're early in your investing career, your plan will do little harm, while being a good experience. But the risk-adjusted return on putting effort into tactics like this is lower than we usually imagine, while the risk-adjusted return on other activities (like work, or car repair, or learning real estate) is usually higher.
There's a forum member called
@chasesfish who FIREd last year from his banking job. If I understand him correctly, he says that up until your first $1 million of investments, usually it's better to focus on work and saving while using relatively simple and stable investing strategies. I would give you the link but I can't find the article among the many good ones on his website.
https://stopironingshirts.com/
