I am a fan of index fund for the many reasons that everyone else here is: low cost of ownership and broad diversification.
When we talk about how diversified VTSAX is, people seem to think that it is the ENTIRE economy, however, it is just publicly traded companies. It does not privately held companies. Index funds are very broad, but they miss a large portion of the economy, and potential gains.
My questions regarding this and a potential weakness of index funds is this: What if a trend of companies "Going Private" happens? It is unlikely, but possible. With wealth being more centralized with fewer people, there could be a shift away from highly regulated and transparent public companies toward more easily administered private companies. There would be less of a need for ease of trading and more of a need for opaqueness and easier administration. I work at a privately held corp and see the advantages. If this were to happen, index funds would be less diverse, and potentially weaker.
I realize that this is a little out there, but it is just about the only downside to Vanguard that I have come up with.
I tried googling this and didn't find any good articles. Any opinions on the matter are appreciated.
BTW, I am still all in on Index funds for the near to mid term, as in 10+ years.