From MarketWatch.com: The downsides to indexed investing - J.J. Zhang's Winner Take All - MarketWatch
"Pure indexing focuses on owning everything regardless of value. Though it removes the emotions and guesswork that often accompany attempts to fairly evaluate price, there are times when this can work against you. Many saw the sky-high valuations of the dot-com bubble in the late 1990s and the recent housing bubble. Pure indexing would have kept pouring money into those sectors regardless of valuation. This indiscriminate buying can come back to bite you."
Finally an article that points out the pros and cons for indexing. People blindly subscribe to indexing due to low cost and broad diversification. I think the balanced approach is to blend both the actively-managed approach with passively-managed approach (i.e., indexing) to meet one's needs and risk tolerance dynamically.
To add: One (with a weak heart) can pick an actively managed mutual fund that offers less gyration than the general market movements; e.g., earn less in bull but lose less as well in bear; so-called Steady Eddy Fund.