Indexing is not monolithic. There are hundreds of index funds. While many are tied to the S&P, many are tied to specific industries such as transportation, growth, blue chip, commodities, utilities, and the like. There is nothing bad or great about index funds. They are all part of a diversified portfolio along with specific stocks and other diversified funds. The key to any stock strategy is to have some growth stock for upside and some very conservative stock (cash, bonds, CDs, blue chips) for downside. Think of a stock portfolio as a football team--you need to play offense and defense.