Yes, you are right about those items certainly but when the market tanks indexers lose just like everybody else.
People who have not experienced severe market crashes in the past are in for a shock when it happens to them. It's an emotional experience.
Thus the smart practice of allocating investments between equities and bonds/cash. It's seems stupid when the market is climbing to hold low performing investments.
When the market tanks you are glad you did.
If you have been reading my posts in this and other investment threads, I have said many times it's highly advisable to allocate:
A portion to a US total stock market index fund,
A portion to an Intentional total stock market index fund, and
A portion to a US total
bond market index fund.
Contribute monthly, weekly or bi-weekly to these funds, rain or shine.
Contribute as much as possible.
Rebalance once a year, on a preset date, to bring your allocations back to target. That means if your target is 30% US stocks and they've grown to 50%, sell 20% and buy more of the International stock index fund , or the US bond market index fund, or both.
Do this long term, 20 to 30 years.
Keep 3 to 12 months worth of expenses or income in
a high yield savings account, an Emergency Fund. How many months you keep, and whether it's expenses or income depends on personal preference, situation, and risk tolerance. You can even do a CD ladder if you have plenty of money there and know you won't need it for a long time.
Not sure what you mean by "stupid when the market is climbing to hold low performing investments." Sounds like market timing to me, and like you're suggesting selling low (low performing investments) and buying high(high performing investment).
How do you know the low performing investment won't climb as soon as yo sell it? How do you know the high performing investment won't crash as soon as you buy it? Nobody knows nothing. You've said it yourself.
Dollar-cost averaging and re-balancing once a year help the passive investor insure buying low and selling high.